Master’s Thesis

Fluid Networks:
The Next Agency Model?

Trevania Henderson

Master’s Thesis

Fluid Networks:
The Next Agency Model?
Trevania Henderson

Master of Business Administration
Creative Leadership
Class of 2008-2010

1. Supervising Tutor:

Doug Guthrie, PhD

2. Supervising Tutor:

David Slocum, PhD

Editing Time

from: March 15, 2009
until: March 24, 2010

Statement of Authorship:
This dissertation is the result of my own work. Material from the published or unpublished work of others, which is referred to in the dissertation, is credited to the
author in the text.

Boston, March 24, 2010

Trevania Henderson

Fluid Networks

Trevania Henderson

Table of Contents

List of Tables ...................................................................................................... IX
1.0 Introduction/Rationale .................................................................................. 1
1.1 Change is afoot ......................................................................................... 1
1.2 Hypothesis: Fluid networks—either of specialty agencies or of
lone rangers—are the most effective partners for clients in the
new marketing universe............................................................................. 2
1.3 Personal expectations and findings .......................................................... 3
1.4 The term “agency” .................................................................................... 4
2.0 Research Methodology and Biases ............................................................. 5
2.1 Sources of research .................................................................................. 5
2.2 Background reading .................................................................................. 5
2.2.1 Sources of articles ......................................................................... 6
2.2.1.1 Database Search ............................................................. 6
2.2.1.2 Google Search ................................................................. 6
2.2.1.3 Advertising Age................................................................ 6
2.2.1.4 Pertinent Articles and Insights ......................................... 7
2.2.2 Bias in article selection .................................................................. 7
2.3 Interviews .................................................................................................. 8
2.3.1 Sources of interview subjects ........................................................ 8
2.3.1.1 Practitioner Interviewees: Agency Size and Type ............ 9
2.3.1.2 Client Interviewees: Corporate Size ................................. 9
2.3.1.3 Additional Interviewees .................................................... 9
2.3.1.4 Geographic Distribution of Interviewees ........................ 10
2.3.2 Bias in interview subject selection ............................................... 10
2.4 Personal experience ................................................................................. 12
3.0 Essential Data: Background, Context and Components ......................... 13
3.1 One hundred years of advertising ........................................................... 14
3.2 What is driving change? .......................................................................... 15
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3.2.1 The digital revolution ................................................................... 17
3.2.1.1 Marketing Today: The shouting is all over ...................... 17
3.2.1.2 Creative Today: No boundaries means no set solution .. 19
3.2.1.3 Success Today: Metrics tell all ....................................... 20
3.2.1.4 Work Today: Dialing it in has a whole new meaning. ..... 20
3.2.2 Compensation Today: Finding a new path to profit ..................... 21
3.2.3 The current fiscal crisis................................................................ 22
3.3 The new norms: What needs to change? ................................................ 23
3.3.1 What the agency delivers ............................................................ 24
3.3.2 The (in)ability to team across boundaries ................................... 26
3.3.3 The compensation model ............................................................ 30
3.3.3.1 The traditional model: commission based ...................... 31
3.3.3.2 The traditional alternative: Fee based ............................ 32
3.3.3.3 The client reaction .......................................................... 32
3.3.3.4 Option: Pay for performance........................................... 32
3.3.3.5 Option: Profit sharing ...................................................... 34
3.3.3.6 The client role ................................................................. 35
3.3.3.7 Whither now? .................................................................. 36
3.3.4 Egregious excess: The mandate to do more with less. ............... 36
3.4 The critical components: What must remain? ......................................... 38
3.4.1 The client relationship ................................................................. 39
3.4.1.1 Winning the business...................................................... 39
3.4.1.2 Keeping the business ..................................................... 40
3.4.1.3 Partnering for productivity ............................................... 41
3.4.2 The team relationship .................................................................. 43
3.4.3 The four C’s ................................................................................. 45
3.4.3.1 Culture ............................................................................ 45
3.4.3.2 Collaboration................................................................... 45
3.4.3.3 Continuity ........................................................................ 46
3.4.3.4 Communication ............................................................... 49
3.4.4 Training and Tools....................................................................... 52
3.4.5 Global Reach; Local Knowledge .................................................. 54
3.5 Conclusion to Chapter 3 .......................................................................... 55
4.0 Analysis: Alternative Agency Models ....................................................... 57
4.1 In defense of the large agency ................................................................ 58
4.1.1 More than the status quo............................................................. 58
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4.1.1.1 Size matters .................................................................... 59
4.1.1.2 Internal shifts .................................................................. 60
4.1.1.3 Starting from scratch....................................................... 61
4.1.2 Analysis ....................................................................................... 62
4.1.2.1 An expertise in establishing and nurturing strong client
relationships. .................................................................. 62
4.1.2.2 A sense of security as a trusted provider for clients. ...... 63
4.1.2.3 A well-oiled machine ...................................................... 63
4.1.2.4 An incubator of strong teams ......................................... 64
4.1.2.5 Dedicated teams that know the client business inside out .. 64
4.1.2.6 A single integrated system that spans the globe ........... 65
4.1.2.7 Many levels of bureaucracy which slow production and
add expense .................................................................. 65
4.1.2.8 A hard time thinking in new ways .................................. 66
4.1.2.9 Conclusion ..................................................................... 66
4.1.3 A word on holding companies ..................................................... 68
4.2 A team of specialized agencies .............................................................. 69
4.2.1 Specialized agencies................................................................... 69
4.2.2 The concept in practice ............................................................... 72
4.2.2.1 Procter & Gamble: Brand Advertising Leader................ 72
4.2.2.2 McDonalds...................................................................... 73
4.2.2.3 Citizens Financial Group ................................................ 74
4.2.2.4 TAM Airlines .................................................................. 75
4.2.2.5 An Apparel Company..................................................... 76
4.2.2.6 The agency perspective................................................. 77
4.2.3 Analysis ....................................................................................... 77
4.2.3.1 Multiple touch points for the client ................................. 78
4.2.3.2 The security of true expertise ......................................... 78
4.2.3.3 Long-standing teams that understand the client ............. 78
4.2.3.4 A client-driven expectation of strong teamwork .............. 79
4.2.3.5 Potential interagency cultural conflicts............................ 79
4.2.3.6 Leaner, quicker, less bureaucratic—and maybe more
cost-effective .................................................................. 79
4.2.3.7 New-media savvy, media agnostic approach with global
reach and local knowledge ............................................. 80
4.2.3.8 Conclusion ...................................................................... 80
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4.3 Fluid Networks ........................................................................................ 81
4.3.1 The fundamental idea .................................................................... 82
4.3.2 Whence the workforce ................................................................... 84
4.3.2.1 Hot senior creatives ........................................................ 85
4.3.2.2 The newly unemployed ................................................... 86
4.3.2.3 Gen Y and beyond .......................................................... 87
4.3.3 Emerging models........................................................................... 89
4.3.3.1 Club Hegarty ................................................................... 89
4.3.3.2 Agency 2.0 ...................................................................... 91
4.3.3.3 Host Universal, Ltd. ........................................................ 91
4.3.3.4 Mavens & Moguls ............................................................ 92
4.3.3.5 Agency Nil....................................................................... 94
4.3.3.6 Victors & Spoils............................................................... 95
4.3.4 Analysis ......................................................................................... 97
4.3.4.1 Relationships still matter. ............................................... 98
4.3.4 2 You don’t need walls; you need infrastructure. .............. 99
4.3.4.3 Wait. You do need walls. ............................................. 100
4.3.4.4 But does the team have to work there? ........................ 101
4.3.4.5 Just who is the team? ................................................... 103
4.3.4.6 Presenting your dedicated experts on any topic ........... 104
4.3.4.7 Keep the team and the institutional knowledge. .......... 105
4.3.4.8 Can there be a culture in a fluid network? .................... 106
4.3.4.9 Being nimble and fluid means perforce less bureaucracy—
and lower costs............................................................. 107
4.3.4.10 Conclusion ................................................................. 109
4.4 DIY: Crowdsourcing by the client .......................................................... 110
4.4.1 A plethora of options ................................................................. 111
4.5.2 Analysis ..................................................................................... 113
4.4.2.1 Relationships—client or team—are more or less forgotten ....113
4.4.2.2 There is no trust, only results....................................... 114
4.4.2.3 Global reach? Local knowledge? You bet. .................. 114
4.4.2.4 Innovative, media-agnostic solutions live here. ........... 114
4.4.2.5 It’s all about cheap, fast, nimble. ................................. 114
4.4.2.6 It’s the bane of the industry.......................................... 114
4.4.2.7 Conclusion ................................................................... 115
4.5 Conclusion to Chapter 4 ........................................................................ 115
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5.0 Conclusion: Which model works best? .................................................. 117
5.1 A quantitative rating of qualitative forces .............................................. 117
5.2 The move towards networked solutions ............................................... 119
5.3 Future fluidity ........................................................................................ 122
5.4 But then what happens? ....................................................................... 123
6.0 Bibliography .............................................................................................. 125
7.0 Interview Subjects ..................................................................................... 133
7.1 Named Interview Subjects ..................................................................... 133
7.2 Anonymous Interview Subjects ............................................................. 140
Addendum........................................................................................................ 141
I

Analysis of Interviews ............................................................................ 141

II

Sample Interviews ................................................................................. 144
1. Karen Dawson, Principal, Two Blue Spruce .................................... 144
2. Deborah Lotterman, EVP, Managing and Executive Creative Director,
Lehman Millet .................................................................................. 150
3. Keith Reinhard, Chairman Emeritus, DDB Worldwide..................... 153
4. Michelle Heath, Vice President of Marketing, Currensee ................ 159
5. Stacey Minton, Director Management Communications, Merck Serono
......................................................................................................... 163
6. An advertising executive, UBS AG .................................................. 170

III Acknowledgements ............................................................................... 175

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List of Tables

Page
Tab. 1:

Practitioner Interviewees: Agency Size and Type

9

Tab. 2:

Client Interviewees: Corporate Size

9

Tab. 3:

Geographic Distribution of Interviewees

Tab. 4:

A Quantitative Rating of Qualitative Forces

118

Tab. 5:

Gauging Change

141

Tab. 6:

What Matters

142

Tab. 7:

What Is Irrelevant or No Longer Functional

143

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1.0

Trevania Henderson

Introduction/Rationale

The established agency model was architected in a time when the task of the
agency was to push one-way messages en masse through a handful of channels.
That world has changed irrevocably—a realization that opens a Pandora’s Box of
questions as to the form—and the role—of the future agency.

1.1

Change is afoot

Keith Reinhard, Chairman Emeritus, DDB Worldwide, states succinctly, “I believe
the traditional agency model is really obsolete. We are competing to see who can
create the best horseshoes.”1
What happened? Fundamentally, digital communication. It has changed the way
consumers live and brands communicate with them. It has changed the way we
think and the way we work. It has changed the expertise required to market and
the ability and cost of accessing that expertise. And it has changed the economic
landscape of marketing—including the primary compensation structure on which
the agency model rests.
Some of these shifts were already occurring—but with the crushing economy of
the last year, the hairline cracks in the model are now cavernous holes. That
begs the question, what’s next?
Many minds are focused on this issue—indeed a simple Google search quickly
surfaces these three recent investigations:

In June 2009 Agency Future launched. “Half documentary, half social media experiment, my ultimate ambition is to produce a snapshot of an industry in flux, while also showcasing the collaborative and transformative
power of the tools that are powering such upheavals.”2

1

Reinhardt, Keith. Chairman Emeritus, DDB Worldwide. Interview November 5, 2009. New York City, New

2

Agency Future website. Accessed October 5, 2009-March 14, 2010. www.agencyfuture.com

York.

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September 24, 2009 the British publication Marketing Week held a conference for marketers from both sides of the aisle (client and agency) titled “Agency Evolution.” The theme echoed again and again: “Faster, action-oriented partner.”3

On November 16, 2009 Sean Corcoran of Forrester Research announced
a new initiative: pondering the future of agencies. The Forrester brand obviously lends the topic further credibility (it also lends Corcoran access to
a far broader network than I have explored).4

One thing is clear: A spirit of change is abroad in the industry…what happens
now will shape the landscape for years to come. These are indeed exciting times.

1.2

Hypothesis: Fluid networks—either of specialty agencies or
of lone rangers—are the most effective partners for clients in
the new marketing universe.

At the September 2009 “Agency Evolution” conference, Karina Wilsher, Managing Director, Fallon, stated, “The old-fashioned supertanker model is already
dead. Clients want smaller collections of people tied to nimble, innovative, evolving structures that can shape and mould themselves into whatever form is
needed to best solve their problems.”5
Indeed, there appears to be a movement away from the traditional agency structure to a more fluid one. Hard data on this is difficult to acquire, but, as presented
within the body of this thesis, empirical evidence is strong. Assuming that this
transition is occurring, questions arise as to why, and how best to shape the new
model(s).
To answer these questions, we must first look at the forces driving change, the
shifting circumstances surrounding the current marketing environment, and how
each force translates to a need for change within the model. We must also look at

3

Agency Future. Agency Evolution Report. Published September 30, 2009; downloaded October 14, 2009.
www.agencyfuture.com

4

Corcoran, Sean. The Future of Agencies: What do you think? The Forrester Blog for Interactive Marketing
Professionals. Posted November 16, 2009; downloaded January 2, 2010.
http://blogs.forrester.com/marketing/2009/11/the-future-of-agencies-what-do-you-think.html

5

Agency Future. Agency Evolution Report.

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those things worth preserving—the essential components of marketing success.
Finally, armed with that “must change/shouldn’t change” matrix, we can examine
multiple agency models—some currently in practice, others visions yet to be realized—judging the relative merits of each in meeting the needs of various types of
clients. And we can see the ascendency of the fluid network.

1.3

Personal expectations and findings

I began this research with the assumption that large multinational corporations
would require large multinational agencies to supply their marketing—but that
start-ups and small to mid-sized companies (< $500 mm) might prefer a leaner
team, one with minimal overhead and maximum flexibility, one that could be
shaped precisely to meet their needs, even as those needs shift. In short: a fluid
network.
In the course of months of internet research and approximately 50 interviews, I
discovered that even many large corporations are evolving toward a multi-source
solution. That solution takes many forms; while it rarely involves a completely
fluid network, it also rarely is exclusive to a single agency or even the sister
agencies within a holding company.
Will brands still need agencies? Definitively, yes. In fact, as the marketing environment becomes increasingly complex, the need becomes increasingly grave. A
more pertinent question is what kind of agency?
Can traditional agencies transition to the new market reality? Do holding companies hold the key? Should digital agencies take the lead, assuming agency-ofrecord priority? Should brands decentralize, creating their own galaxy of best-ofbreed partners? Or do “agencies” themselves take on the task of decentralization, whittling down to lean core teams that access top talent chosen specifically
for the brand? What role does crowdsourcing play? These are the questions we
will explore in the following pages.
In the end, there will not be a single answer; a kaleidoscope of multiple models
will exist in the future, just as they do now. It would be impossible to name or

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predict them all; what is possible is to examine the current industry trajectory and
to contemplate the most effective options for future operation.
As one blog commentator wisely noted, “It’s one thing to see the writing on the
wall, and quite another thing to do the right thing about it at the right time.”6 Perhaps my work will provide some fodder for both agencies and other researchers
contemplating the situation as we move forward.

1.4

The term “Agency”

It is important to note that throughout this thesis I continue to use the term
“agency” to describe a wide range of organizational models.
Webster’s Third New international Dictionary defines agency as “a person or
thing through which power is exerted or an end is achieved; an establishment
engaged in doing business for another, <an advertising — >.”7 Whatever the
form—from a 90,000-person conglomerate to a lone person crowdsourcing solutions via a robust website—we are still discussing the entity through which a client’s marketing objectives are achieved. So, for both swift comprehension and
long-term accuracy, I feel the term remains the best choice.
It is also important to note here that I am considering marketing holistically, rather
than advertising specifically. As we will discuss in Section 3.2.1, with the shift
from consumer as target to consumer as collaborator—and the concomitant explosion of marketing options—advertising alone will not satisfy many clients, nor
should it.

6

Corcoran; Alan Peters, Principal, Singlebound Creative, commenting.

7

Webster’s Third New International Dictionary of the English Language Unabridged. Ed Philip Babcock Gove,
PhD. Merriam-Webster Inc, Publishers. Springfield, Massachusetts, 1993.

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Research Methodology and Biases

Investigating an industry in flux is somewhat daunting, and quite possibly foolhardy. While I made every effort to be thorough in my methods, I was perforce
constrained by both time and access; this research is in no way exhaustive. Obviously, these interviews and articles represent only a tiny portion of the industry
and the writings concerning it; indeed, new relevant articles appear to be published daily, and every person with whom I speak and article which I read points
to new avenues of exploration. Moreover, I am not a scholar of (nor particularly
well-informed about) the business machinations of the agency world—the mergers, the start-ups, the superstars or even the thought leaders. Consequently, this
thesis draws broad conclusions from a very small sample of representative opinions.

2.1

Sources of research

I took a two-pronged approach to conducting my research, turning first to existing
print materials and then probing the experience and opinions of a host of people—both practitioners and clients—from companies of all sizes. The literature
review provided a grounding in current thought, as well as a more detailed understanding of the advantages of, issues surrounding and best practices related to
virtual teams. The bulk of my findings come from individual interviews; this seems
important as the changes—and solutions—being described here are occurring in
real time. Finally, a reasonable amount of the thinking presented in this paper
stems from my own personal experience, as a client, as in-house talent, as a
freelance/consultant, and as the conductor of a fluid network of specialist agencies and lone rangers.

2.2

Background reading

Before initiating any primary research, I conducted a review of existing publications via a multi-term search of databases through two key internet portals. Subsequently, I conducted a similar search via Google. Additionally, in March 2009 I
subscribed to a number of media feeds from Advertising Age publications.
Throughout the time I have been working on this thesis, I have earmarked anything pertinent found in my daily and academic reading.

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2.2.1

Trevania Henderson

Sources of articles

The articles that underpin this thesis stem from four key sources:

Database search

Google search

Advertising Age

Pertinent articles found in general reading

2.2.1.1

Database Search

In March 2009 I searched http://search.ebscohost.com [recommended by Steinbeis University] and the Boston Public Library databases [Business and Industry
from 1994-2008; individual periodicals as pertinent and available] on the terms:

Advertising Agency

Creative Team

Virtual Team

Virtual Agency

Agency Model

Agency Future

2.2.1.2

Google Search

In July and October 2009 I conducted Google searches on the terms:

Agency Model

Agency Future

Future Agency

I have also used Google to do follow-on research concerning items of interest I
have found in other reading.
2.2.1.3 Advertising Age
From March 2009-2010 I have subscribed to several daily Advertising Age news
feeds. At least once a week, these have produced some article that appears relevant—whether about an enterprising approach to handling industry job loss,8

8

Proloux, Erik. Stop waiting for the rain and make your own weather. Advertising Age, May 06, 2009;
http://adage.com/results?endeca=1&return=endeca&search_offset=0&search_order_by=score&x=4&y=5&s
earch_phrase=stop+waiting+for+the+rain+and+make+your+own+weather.

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trends towards crowdsourcing and the “gig economy” 9 or Crispin selling its interns’ services on EBay.10
2.2.1.4 Pertinent Articles and Insights
Having had this topic in mind for the past 18 months, I have both subconsciously
and consciously collected articles and readings that touched on some aspect of
virtual collaboration, entrepreneurship, and changes in the advertising industry.
Sources include the Wall Street Journal, the Boston Globe, the New York Times,
as well as case studies and comments professors have made in class. Occasionally interview subjects have suggested follow-on reading.

2.2.2

Bias in article selection

Because my thesis deals with the current and future state of the industry, I focused my attention on periodicals rather than books. Moreover, these are largely
industry periodicals; indeed, very few of the articles cited are academic in nature.
However, because I do not have access to subscription services for any industry
publication, it is entirely likely that I have missed some pertinent articles and
commentary.

Further, while my initial database research was quite methodical, my subsequent
reading has been limited to articles that caught my eye. There is a strong probability that they reinforce my sense that the traditional single-source agency
model is evolving towards a more fluid scenario.

9

Eidson, Kelly. Tools for the Gig Economy. Advertising Age. Posted April 17,2009; downloaded July 1, 2009.
http://adage.com/print?article_id136072

10

Parekh, Rupal. Crispin Sells Its Interns on EBay. Advertising Age. Posted May 18, 2009; downloaded May
18. 2009.
http://adage.com/results?endeca=1&return=endeca&search_offset=0&search_order_by=score&x=4&y=5&s
earch_phrase=crispin+sells+its+interns+on+ebay

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2.3

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Interviews

To ask, “What do clients need and how do we best deliver it?” poses a striking
sampling challenge. The term “clients,” after all, covers a wide swath of enterprises, whose needs are as varied as their profiles. Who gets to determine the
optimal solution—or, for that matter, even define the issues? Over a six-month
period I have conducted approximately 50 interviews with a host of subjects representing both client-side and agency-side views, as well as a few people who fall
outside those two arenas, but seemed to have pertinent perspectives.
2.3.1

Sources of interview subjects

In identifying interview subjects, I began with my personal network: colleagues
and former colleagues, clients and former clients, friends. I sought people from
agencies and clients of all sizes. Then I made a grid to illuminate the areas that
lacked representation, and made a plea to specific people to reach within their
networks to fill in the holes.

The charts below detail the number of people with whom I have spoken, stratified
by agency or corporate size. A final chart shows geographic distribution.

Despite my concerted effort to find representation of companies of all sizes, my
practitioner interviews are disproportionately weighted toward fluid networks
and/or smaller agencies as measured by numbers of people employed. Conversely, my client interviews are disproportionately weighted toward clients from
>$1 billion companies; the latter is due to my failed quest to find a statistically
significant number of clients of multinational agencies.

Because many senior level people have been on both sides of the equation, serving as practitioners and clients in companies of all sizes, I have included a second row that indicates the number of other interview subjects who have worked in
a given role at some point in their career. Hence, someone who has always
worked for a multinational agency is only represented in that column under “current”; someone who began at a small agency, moved to a multinational, worked
for a >$1 billion company and now is part of a fluid network is represented in all
four areas, either “during their career” or “current.” The “total” line in each column
shows the collective number of voices representing each perspective.
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2.3.1.1

Trevania Henderson

Practitioner Interviewees: Agency Size and Type

These interviewees include both creatives and account people.

Tab. 1 Practitioner Interviewees: Agency Size and Type

2.3.1.2

Client Interviewees: Corporate Size

These interviewees are primarily marketing executives; one is a division president.

Tab. 2 Client Interviewees: Corporate Size

2.3.1.3

Additional Interviewees

I also interviewed four people in related industries—three management consultants and an organizational design/co-working space guru.

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Geographic Distribution of Interviewees

While my interview subjects primarily reside in the northeastern United States,
there are representative voices from around the globe.

Tab. 3 Geographic Distribution of Interviewees

2.3.2

Bias in interview subject selection

Ideally, interview subjects would be a random sample of people representing
every industry and every size corporation (thus every type of marketing need), as
well as every type of marketing service provider. We do not operate in an ideal
world. Though most interview subjects were not previously acquaintances, all
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were found via my personal and professional network. This holds several implications:

As a practitioner of the fluid network model, my industry contacts are primarily among clients and purveyors of smaller or fluid agencies. Clearly
these interviewees are likely to be biased towards the model.

Equally, that total strangers were willing to give me their time and insights
for no personal gain may indicate that they have a bias against the large
traditional agency model—or at the very least an interest in exploring alternatives.

People working within the context of any given model (multinational
agency or fluid network) are more likely to prefer and defend their model,
so the inequity of my sample perforce leads to inequity in their collective
responses.

Through personal and Berlin School of Creative Leadership networks, I
was also able to speak with personnel from large multi-national agencies
and to clients from large multinational companies, yet I was struck by how
extremely difficult it was for me to find clients of the large multinational
agencies. I put a fair amount of concerted effort into locating them, but
only found two. (Agencies, understandably, were not enthusiastic about
introducing me to their clients). Clearly these clients exist, but they exist
largely outside my reach.

In sum, there are lots of large and multinational agencies who are serving large
and small clients alike with skill and success. Their knowledge, attitudes and
practices are not adequately reflected in these pages.
Similarly, although I consciously strived to expand the geographic breadth of my
subjects—and indeed have a few representative voices from Canada, Central
and South America, Europe and Japan, and across the United States—half my
interview subjects are drawn from the northeast of the United States, bringing into
question whether the findings hold true across the nation and/or across the world.

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2.4

Trevania Henderson

Personal experience

As someone whose livelihood depends on fluid networks—building and running
project-specific teams—I clearly have a strong bias towards the model. Many of
the reasons I founded my business are echoed throughout this document, observations that:

What constitutes marketing is changing more quickly than any bureaucratically bound institution can.

Many of the most talented people are opting out of the large agency
world—often because they have been promoted beyond the creative work
they love best or find their creativity stymied by layers of bureaucracy.

Clients are under pressure to deliver more for less.

In the traditional agency model, clients spend a lot of money for warm
bodies; the larger the agency, the more people “needed” in every meeting
(and the more meetings that “need” to occur). At some point it seems as
though this investment yields diminishing returns.

At some agencies, “star” talent spends a disproportionate amount of time
on pitches, in effect creating a bait and switch. Smaller accounts often are
shunted onto junior teams—and the large teams that service large accounts often contain a lot of filler. Freelance talent is brought in at both
ends: to add fresh perspective to a stale account team and to handle the
drudge work while the in-house talent moves on to a new account. By
forming teams of those same freelancers, one could deliver the same
personnel at a fraction of the cost—and with total transparency.

With each gain in technology, working from disparate locations becomes
easier.

I have found a robust client-base among start-ups and mid-sized companies, and
a secondary client-base handling non-core projects for agencies—often servicing
multinational companies. This sparked the question as to where the limits of the
model lie, as well as how it fits within the general industry-wide shift.

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3.0

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Essential Data: Background, Context and Components

“Change, Change or Change: Options for the Agency of the Future”11
Maurice Levy
Chairman and CEO, Publicis Groupe,
The call for agencies to change rings loud from every direction. But just saying
“change” is not enough. Before one can parse a problem, much less posit solutions, it is imperative to have a strong sense of the present state and to identify
pertinent trends. It is also essential to identify the building blocks that will create
new forms.
In this section, we examine the current state of the industry. Specifically, I present
data I have gathered through extensive reading and interviews; this data plumbs
people’s views on the industry, including ways in which it is changing and forces
which are causing that change. Further, it examines various facets of agencies—
from relationships to processes to tools and services—and provides insiders’ insights—drawn from my interviews—as to which facets need to change and which
are essential to maintain in order to ensure effective marketing and/or effective
business management. Clearly, not all interviewees agree on these issues;
where there is disagreement I present multiple sides of the argument and consider the biases from which each view springs.
Using these insights, in Chapter 4 we will examine specific agency models, analyze each against the criteria set forth in Chapter 3, and assess their relative efficacy.

11

Levy, Maurice, Chairman and CEO, Publicis Groupe. 2006 Keynote speech at the American Advertising
Federation National Conference. Accessed October 14, 2009.
http://www.tvmainstream.com/default.cfm?ID=6969&type=wmhigh&clip=2

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Trevania Henderson

One hundred years of advertising

“It’s no secret that the ad agency model is broken. You can pick up any back issue of Advertising Age or Adweek and read about the demise of the business.”12
Brad Abare
Founder/President, Personality
The advertising business is well over 100 years old; in that time, agency models
have undergone many iterations. The R/GA website documents the evolution of
the agency structure. In the 1950s client teams included copy, art direction, media and account management; by the 1990s that matrix stretched to encompass
nine disciplines, overseen by account management, in turn overseen by vice
presidents of each marketing silo (advertising, CRM, ecommerce, etc.), underpinned by production and all mirrored by members of the client team—a complex
and unwieldy configuration.13
Glancing over the last decade, we see the rise in digital agencies, as well as the
advent of the non-agency. In 1999 Naked ushered in something between an adand-media shop and a consultancy, a group of 65 strategists who simply insert
themselves at the heart of the creative process with a view to making sure the
best ideas get executed. “The firm’s fans credit it with unleashing creativity that
had been stifled by bureaucracy for years.”14 Detractors claim there is nothing
new but the packaging.
That same year, Isabel Bird of The Coaching House, noted that “every single
agency I’ve been to is looking for a new process.”15
Five years later, Tim Williams, writing for Marketing Professionals, noted that
“large advertisers are dissolving their longstanding relationships with agencies of

12

Abare, Brad. Ad Agency Model is Broken, Duh. Think Personality.com. Posted April 9, 2007; downloaded
October 14, 2009. http://www.thinkpersonality.com/archives/2007/04/gency_model_is.html

13

R/GA website. Accessed February 7, 2010. http://www.rga.com/about/featured/our-model

14

Sacks, Danielle. Is Mad. Ave. Ready to go Naked? FastCompany.com Reported October 2005. Posted
December 19; downloaded October 14, 2009.2007.
http://www.fastcompany.com/magazine/99/naked.html?page=0%2C1

15

Alburty, Stevan. The Ad Agency to End All Ad Agencies. FastCompany.com. Posted December 18, 2007;
downloaded October 14, 2009. http://www.fastcompany.com/magazine/06/stlukes.html

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record and turning to branding specialists, media specialists and CRM specialists
to increase the effectiveness of their marketing dollars.”16
And now we stand in 2010, where it seems the industry is poised for a seismic
shift. As one blogger notes, “even the name ‘advertising agency’ is a problem.
‘Advertising’ refers to paid media, and ‘agency’ connotes the idea of commissioned agents.”17 Neither stirs the desires of today’s client base. In fact, they
seem to nicely encapsulate the twin core problems: The way brands interact with
customers has fundamentally changed, and the compensation model no longer
works.
Is this the start of a revolution?

3.2

What is driving the change?

“The big agencies know they have to change; the old agency model is dead.”18
Chip Bergh
Group President, Global Personal Care, Procter & Gamble
“The threat is if agencies don’t look at the model and explore new forms of connection and collaboration.”
Brian Perkins
Vice President Corporate Marketing, Johnson & Johnson 19
“Change is hard.”
Zo Bjorgvinsson
Creative Director, Founder, Dotbox20
Article after article, voice after voice, speaks of change in the industry. In the
course of my interviews, nearly half the people I spoke with volunteered that the

16

Williams, Tim. Evolve or Die: The changing model of the advertising agency. Marketing Professionals.com.
Published August 31, 2004; downloaded October 14, 2009. http://www.marketingprofs.com/4/williams1.asp

17

Ibid.

18

Bergh, Charles V. Group President, Global Personal Care, Procter & Gamble. Interview December 15, 2009.
Boston, Massachusetts.

19

Anomaly website. Accessed January 3, 2010. http://www.anomaly.com

20

Bjorgvinsson, Zo. Creative Director, Founder at Dotbox. Interview November 23, 2009.

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industry was in the midst of change. Only one denied it. The reasons given are as
myriad and as layered as the people giving them, but they come down to two
things: the digital age and money.
As Mel Exon, Managing Partner of BBH Labs, the “global innovation unit of BBH,”
wrote on the BBH Labs site,
“Two things are apparent to anyone whose eyes are open:
1. Social media, CS and technology change everything. They create new
opportunities and beg that we think differently about our business, prospecting, partnering, creating, everything.
2. Clients are demanding, not asking for but DEMANDING, lower costs and
greater efficiencies. You can squeeze every last person and resource you
have, work even longer days than we historically do, or get inventive.
Funny thing is, we are supposed to be creative.”21
In the next section we will explore the implications of these dual pressures: how
they may affect the type of work needed, the people doing it, even the definition
of success.
However, first, it is important to note that not everyone agrees that there is a
change underway—nor a need for one. Instead, some contend that the noise is
all in the trenches, but that when you rise to the 50,000 foot view it is clear that,
fundamentally, nothing has changed. Craig Markus, Executive Creative Director/Executive Vice President at McCann Erickson & Tag Ideation, expressed this
viewpoint quite eloquently. “The problems a client has with their agency change
every three years. It was Facebook last year, it’s Twitter today, it was Cable 10
years ago—but it’s always the same issue. When digital was introduced all the
clients said, ‘The sky is falling! We have to do digital!’ So they went to the small
digital specialty shops. Now they are back with the big shops, because we do

21

Exon, Mel. Crowdsourcing clients: where Agency Nil went next. BBH Labs, Posted August 11, 2009; downloaded October 14, 2009. http://bbh-labs.com/crowdsourcing-clients-where-agency-nil-went-next

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digital too.”22 In short, to Markus, what looks like a crisis today is simply the latest
bump in the road, changes agencies can easily accommodate.
3.2.1

The Digital Revolution

“An ad campaign ten years or so ago used the line, ‘The internet changes everything.’ It’s more true today than ever before.”23
Chip Bergh
Group President, Global Personal Care, Procter & Gamble
The advent of the internet has wrought change in every area of the marketing
arena—from the way consumers glean information, and thus the way we market
to them, to the ways we produce work and that work is judged. The internet has
broken open the world of marketing and set the opportunity and the mandate for
fundamental change.
3.2.1.1

Marketing today: The shouting is all over.

“The role of marketing is changing from an Outbound perspective (shouting
longer and louder) to an Inbound one (listening carefully to more and more people).”24
Eric Goldman
Principal, Gossamar
The internet and other digital applications have not simply added web sites and
banner ads and apps to the marketing arsenal. The web has become our de facto
town square, where shoppers chat and compare insights as they squeeze the
cantaloupe. Online communities, backed by the proliferation of information accessible at the click of a mouse, mean consumers know far more than brands
choose to tell them—and they are basing decisions on how brands treat them.
As Aaron Savage of Interactive Mix, comments, “Customers don’t want to hear
the megaphone of the ‘big idea’ anymore, and they don’t care about ‘the message.’ They care even less about whether it is direct, brand-focused or anything

22

Markus, Craig. Executive Creative Director/Executive Vice President at McCann Erickson & Tag Ideation.
Interview November 5, 2009. New York City, New York.

23

Bergh.

24

Corcoran; Eric Goldman, Principal, Gossamar commenting.

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else. All they care about is whether a company is prepared to be brave enough to
listen to them and develop a relationship.”25
Further, in the internet age there is nowhere to hide. People on the far side of the
globe know as much about your business and your product as the person down
the block. Chip Bergh, a Global President at Procter & Gamble, notes, “If you
launch a new idea, a new variant or new sub-brand, everyone knows instantly.
Things move faster; consumers themselves are more complex and at the same
time more similar across the globe.”26 That makes the marketing puzzle analogously more complex and more interconnected; it also means it needs to be
solved more rapidly.
As a result, the formulas for successful marketing are fundamentally transformed.
Bergh continues, “The consumer commercial model has changed: To be a successful marketer is more complicated than getting the right product, packaging it
and putting your ad on TV. There are no longer just 3 TV channels. You can
spend $100 million and not reach 50% of your target.”27 A senior advertising person at UBS AG furthers this notion, pointing out that, “The use of media is driven
by target audience behavior; as their usage has changed, shifting toward nontraditional media, we have been forced to change as well.”28
The power of pervasive media has been chiseled away, ironically, by even more
pervasive yet highly fragmented media. That is a sobering realization for
brands—and one agencies need to take to heart. The bottom line: “Agencies
need to adopt a new way of thinking to survive; the clients already have.”29

25

Corcoran; Aaron Savage, Managing Director Interactive Mix commenting.

26

Bergh.

27

Ibid.

28

Senior advertising person, UBS AG. Telephone interview January 5, 2009.

29

Fling, Brian. The agency model is dead. Posted August 1, 2006; downloaded October 14, 2009.
http://blueflavor.com/blog/2006/aug/01/the-agency-model-is-dead

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Trevania Henderson

Creative today: No boundaries means no set solution.

“The internet has brought transparency. Consumer choices are influenced less
and less by messages about how great product X is, and far more by their direct
experience of organizations.”30
Seth Campbell
Account Executive, Dare
With the rise of everyone knowing everything, comes a diminished attention span
coupled with a chary eye towards who’s selling what. Not to be too redundant,
but the traditional methods of marketing just aren’t cutting it. Consequently, the
traditional agency, which is built to deliver (and financially incented to sell) traditional media solutions needs to give way to something more…well, creative. And
as the definition of “what is marketing” changes, so does definition of “what is
creative.”
Of course, brands are still interested in traditional channels: print and television
ads, in-store displays, sampling programs; indeed, the contents of the mailbox
show that not even direct mail has diminished. However, the “must have” list now
has expanded to include any area in which digital technologies touch people’s
lives, including the digital variants of traditional media (banner ads and push
email), blogs, online communities, games and mobile phone applications.

Indeed, in this 360° immersive marketing atmosphere, the best answer might be
anything: an experiential event, statement architecture, a fashion show, a blimp—
or just the script you train your sales staff on. “Creativity is a much broader term
these days, as it encompasses everything from a media strategy to a product
development cycle to the content strategy on a Facebook page. And the agency
of the future is going to have to jump on all these loose threads and tie them together into some sort of cohesive something.”31

30

If I launched an agency. Campaign. Posted September 25, 2009; downloaded November 5, 2009.
http://www.campaignlive.co.uk/news/features/943002/I-launched-agency/

31

Wolk, Alan. “The End of ‘Creative Hegemony,’ The Toad Stool. Posted September 14, 2009; accessed
March 20, 2010. http://tangerinetoad.blogspot.com/2009/09/end-of-creative-hegemony.html

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3.2.1.3

Trevania Henderson

Success today: Metrics tell all.

“Metric-driven decision making is replacing opinion-driven decision making.”32
James Sherrett
CEO, AdHack
When asked how they measure successful creative, people agree it is totally subjective. “It needs to give me a pit in my stomach,” says Michelle A. Heath, Vice
President, Marketing, Currensee, a social network for Forex Traders. “I want to
know how it is pushing us forward, how is it creating something different for the
target audience that is going to make them pay attention.”33
Yet, when asked how they measure a successful campaign or initiative, both clients’ and practitioners’ responses were far more objective; several agencies
noted that they were being pressured to provide clearly measureable results.
Marc Osofsky, Vice President, Global Marketing, Optaros, observes, “We keep
hearing the same thing from our clients: They want to create authentic and helpful tools and content, and [to place them on third party sites] where their target
audiences are. Then they want to track, manage and test these experiences in a
manner similar to Google Adwords.”34 Score three for the internet.
3.2.1.4

Work today: Dialing it in has a whole new meaning.

“Creativity and ability once trapped in the agency space has been set free.”35
Brian Fling
President, pinch/zoom
The internet boasts a host of tools that abet and promote virtual work and collaboration. The result is two-pronged, both unleashing top creatives from their
desk jobs and harnessing the masses of people who suddenly find themselves
without desk jobs—as well as providing access to those in lands far away.
Online document-sharing spaces, from Huddle and google.docs to Box.net and
Yuuguu, let projects live in the clouds. Skype makes video conferencing available

32

Corcoran; James Sherrett, CEO AdHack commenting.

33

Heath, Michelle. Vice President, Marketing. Currensee. Interview July 18, 2009. Cambridge, Massachusetts.

34

Corcoran; Marc Orsofsky commenting.

35

Fling.

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to anyone with a newish computer. LinkedIn helps people preserve their networks, once they are no longer face to face, while Blellow and Beehance Network
give them a place to elicit feedback—and peer plaudits. And, crowd-sourcing
pervades every niche from campaign concepts to client referrals.
Of course, these same tools are equally effective whether used within the agency
context or extra-agency: Crowdsourcer Sherrett notes, “We’re seeing the creative
process opened and reconstructed to fit the creative output needed. Team making and idea creation are happening on the fly through web-based tools.”36 Giles
Rhys Jones, Director Interactive, Ogilvy & Mather, concurs, “The growing accessibility of information technologies puts the tools required to collaborate, create
value and compete at everybody’s fingertips—not only consumers, but advertising agencies, marketers and their staff.”37
But it also means that the world is suddenly a much smaller place. “Now talent
can come from anywhere in the world, not just Madison Avenue. And a kid in
Bakersfield, CA (or Lahore, India) has access to sophisticated tools that not that
long ago were only affordable for huge agencies. Add in the DIY creative trend
that has consumers making the commercials and you can see why agencies are
taking another look at ideas that would have been laughed about over a three
martini lunch by Roger Sterling and Don Draper,”38 concludes Rick Liebling,
Global Director, Client Management, Taylor.
3.2.2

Compensation Today: Finding a new path to profit

“Bernbach said that a properly practiced creative can make one ad do the work of
ten. In the old system, bad creative that requires ten ads means you make ten
times as much money as good creative that only requires one ad.”39
Keith Reinhard
Chairman Emeritus, DDB Worldwide

36

Corcoran; Sherrett commenting.

37

Jones, Giles Rhys. Manifesto for a new Agency. Posted on Slideshare August 2009; downloaded November
17, 2009.

38

Liebling, Rick. Agency Nil, Crispin Porter + Bogusky & BBH Labs on agency models. Eyecube. Published
June 2, 2009; downloaded October 14, 2009. http://www.rickliebling.com/2009/06/02/agency-nil-crispinporter-bogusky-bbh-labs-on-agency-models/

39

Reinhardt, Keith. Chairman Emeritus, DDB Worldwide. Interview November 5, 2009, New York City, New
York.

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Monetarily, there is a far deeper issue at work than the current economy. Clients
are dissatisfied with the compensation model—and perhaps even more pertinently, it largely does not parallel the new forms of marketing that are taking hold.
That means incentives are out of alignment with goals. Coupled with powerful
margin pressure being exerted by holding companies, the current situation is untenable. We will explore this in greater depth in Section 3.3.3.
3.2.3

The current fiscal crisis

“It’s the economy, stupid.”
Bill Clinton’s 1992 presidential campaign
For decades, clients have been under pressure to do more for less. Then came
the fall of 2008. As Gawker Media owner Nick Denton stated in Advertising Age,
“This is an ‘extinction level event.”40
Smart (and desperate) agencies have cut costs to the bone. Many have cut staff;
65,000 jobs were eliminated between December 2007 and February 2008
(though, interestingly, employment at public relations agencies grew 1.2%; PR is
less expensive to implement).41 Many agencies have also cut fees. Peter Pappas, Principal at 8 Beacon Partners, an unabashedly virtual firm, says he normally profits in a down economy. But, he muses, “2009 has been a challenging
year. Even the big agencies are willing to compromise on money, so they can
retain clients. The downtown agencies that got it were charging 30% less than I
had budgeted. Essentially, they were giving it away not to lay people off. This
downturn has created interested dynamics.”42
Not all agencies are getting that message, however. As Heath comments, “I have
to look at how can I make the most out of the resources I have. I found that I can’t
just go to an agency and say: ‘I have half a million dollars, how shall I spend it?’
Now I have to really articulate my goals, then figure out how to reach them all
within my budget.”43

40

Dumenco, Simon. In a rapidly shrinking media land: What’s your Plan B? Advertising Age, 80 (6): 15, February 16, 2009. ISSN: 0001-8899.

41

Johnson, Bradley. Ad industry cut another 18,700 jobs in December. Advertising Age, 80 (5): 1, February
09, 2009. ISSN: 0001-8899.

42

Pappas, Peter. Principal, 8 Beacon Partners. Interview November 12, 2009.

43

Heath.

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She continues, “For example, I was producing a video, and I wanted to do it in a
cheap and effective way. I asked ‘Who knows some really good freelance videographers?’ My friend from an agency said, ‘I can do it for half a million, but these
two guys can do it for $35,000.’ I was able to do a great job cost effectively.”44
Of course, that doesn’t mean the change is permanent—or at, least, not because
of the economy. Every time we have a down economy, work shrinks and agencies follow suit. Agencies try new things to attract and retain clients. For instance,
“after 9/11 some agencies stopped charging for time, and started charging flat
fees.”45 Clients look for cheaper solutions that may come in the shape of freelancers or one- or two-man shops—many of whom, laid off from their agency,
simply pick up the same clients on their own. When the economy changes, work
picks up, large agencies hire again and everything goes back to normal.
Will that hold true this time? Certainly both clients and talent who have missed
the comfort of their agency homes will scurry back; change is hard. But for others, this downturn may offer the chance to re-evaluate. Creatives who have figured out how to run their own businesses will never go back; clients who have
found a highly satisfactory solution, perhaps better attuned to the current nature
of marketing, and to their budgets, may be loathe to return to the agency system,
too. In sum: I believe the current economic crisis will not be the cause of permanent change, but may hasten some of the changes that were already underway.

3.3

The new norms: What needs to change?

“In the new network, it’s all about the brains, not the box.”46
Juniper Networks ad
If the world has changed, then to continue to thrive—and stay relevant—agencies
need to change too—but what parts and to what degree? Tracking the zeitgeist
shifts identified above (pull vs. push marketing, new creative outlets, new metrics
for success, new modes of working, and new compensation structures) against
standard agency protocols, we can easily identify some fundamental changes

44

Ibid.

45

Leonetti, Elaine. Director, Strategic Development, Six Degrees. Telephone interview November 20, 2009.

46

Juniper Networks ad; Wall Street Journal, December 4, 2009.

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that must occur, as well as some fundamental factors that any new model must
incorporate to succeed.
3.3.1

What the agency delivers

“The advertising industry as we know it is facing an Armageddon moment. If we
want to remain relevant, we need to start playing a broader role all along the
value chain.”47
Ian Millner
Joint CEO, Iris
If the definition of marketing has changed, then so has the list of deliverables. To
recalibrate, agencies need to stop thinking in terms of tactics and take a much
broader strategic view. Just as we can no longer run a great 30-second television
spot and win masses of customers, we can’t simply switch that firepower to the
internet and expect it to work. As digital agency executive Aaron Savage wryly
comments, “Using Twitter isn’t a strategy.”48 His point: marketers need to “stop
looking at tactical disciplines and start looking at the customer and the journey
they need to go on in order to become and remain a customer.”49 That journey is
likely to wander well outside the disciplines currently housed within agencies.
Reviewing her career, veteran client Michelle A. Heath describes the evolution
thus: “When I was running marketing for Manulife Financial we used a great
agency and they did all our print; we had a whole marketing and advertising system. It is so different now than it was 10 years ago. I almost feel like in some
ways, especially in the world of social media, the agencies are behind. They were
so focused on traditional media buys and pitching commercials and big ticket
items that they missed the ball and are all struggling now, trying to catch up.”50
Charles Hughes, Group Director Creative Services at The Clarks Companies
North America has brought all his creative in-house, and then supplements with
“whatever types of talent I need. If we can’t think of anything else to do we will
come up with a print ad, whereas 10 years ago it was the Holy Grail. Customers

47

Agency Future, Agency Evolution Report.

48

Corcoran; Savage commenting.

49

Ibid.

50

Heath.

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are so media savvy—and print ads are too passive. I have three kids; they don’t
watch much TV and they never page through a magazine. They are a lot more
interactive, you have to create new touch-points to engage these guys. The number of options is mindboggling.”51
Not only does this mean agencies need to learn to think another way, it means
they need new skill sets on staff. “To a hammer everything looks like a nail. If you
go to an agency you will get an agency solution, what they are good at,”52 observes Hughes. Dick Dunn, a former vice president at Carlson Marketing Group
offers hard proof. “At Carlson virtually everything is handled in house, and we
sold that as an advantage—that our strategist wouldn’t come up with something
that couldn’t be executed because the strategist knew what our capabilities
were.”53 That is fine if some iteration of the agency’s standard solutions is right for
your brand, but it underscores the extreme unlikelihood of out-of-the-box thinking.
As the website of Anomaly (“the unagency”), admittedly an extremely biased
source, avers, “What this means for the client is that the resulting end-product…is
not necessarily an objectively conceived, truly innovative solution, but more likely
and unfortunately, a discipline-centric solution that is awkwardly integrated across
channels as best as possible.”54
Heath concurs. “It’s a capability issue. Today, agencies don’t have the expertise
to help me grow a viral brand. They are sourcing it via freelancers. [When I
worked with agencies] they weren’t bringing me anything that I couldn’t have
thought of myself. If I am spending that money, I am expecting them to think way
outside the box…and I have pretty high standards for what [out of the box] looks
like.”55
Critically, for most agencies the financial model doesn’t support thinking outside
their skill set, so there is an inherent conflict of interest: “The agency must filter all
their ideas through the machine they must keep feeding.”56 Of course, everyone
talks about being media agnostic. Five years ago, Fast Company reported that
51

Hughes, Charles. Group Director Creative Services at The Clarks Companies North America. Interview
November 21, 2009. Newton, Massachusetts.

52

Ibid.

53

Dunn, Dick. Director, Coalition Marketing, BI. Telephone interview November 25, 2009.

54

Anomaly website.

55

Heath.

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flagship agencies such as BBDO and major media buyers Carat Americas and
Starcom MediaVest Group said they were willing to put marketing dollars wherever they have the most impact—“commissions and industry awards be
damned.” But is that what agencies truly practice? Jon Wilkins, of Naked Communications, thinks not, finding it unlikely that Madison Avenue would ever recommend reshuffling a $30 million television budget to train call-center reps; after
all, “they are in the business of producing advertising, not training manuals.”57
The bottom line: When an agency has really good writers and designers on staff,
they are not going to tell clients to stage a street performance or present a fashion show or get the in-store sales force to persuade customers to fill out a form.
Moreover, if they did, most would not have the skills in-house to translate their
ideas to reality.
There is a clear need for change, but also cause for optimism. First, print and
broadcast won’t evaporate overnight. More importantly, in many ways this situation frees agencies to return to the more premier position they enjoyed half a century ago. As Keith Reinhard notes, “We used to be brand consultants in the
1960s; we can be again.” He explicates the difference thus: “Then we just had to
run a TV ad. Now there are so many points of contact—people in the street, people on the internet. We need to pay attention to how we reach them, how the
brands are talking to them. Otherwise we all become carpenters instead of architects—and people will buy carpenters at the lowest price.”58
3.3.2.

The (in)ability to team across boundaries

In the introductory section detailing changes wrought by the world wide web, we
addressed the freedom it has given individuals and teams. Work now easily
spans time zones, skills can be imported, and creatives who seek the quiet of
home or the stimulation of Tokyo’s Shibuya Crossing can work in the locale that
best serves their muse. This may benefit agencies by providing a broader pool of
talent and simplifying issues related to servicing international accounts.

56

Abare.

57

Sacks, Danielle. Is Mad. Ave. Ready to go Naked?

58

Reinhard.

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But before they can harness these advantages, agencies must conquer teaming
across existing boundaries; separate silos working under the same roof—and
within an agency network—need to play nicely together. Story after story says
they don’t. Turf wars may or may not frustrate the denizens of the agency (some
may even find them invigorating), but they decidedly do not serve the client. And
again, clients notice.
Disciplinary Xenophobia is a term coined by Dr. Denis Benson, a writer and consultant in Columbus, Ohio, to describe why different departments of a company
don’t get along.59 Alyson Young Magliozzi, a veteran of five agencies and now
Director of Marketing Operations at a $2 billion company, describes how it works
in real life. “Having worked with agencies that claim to handle it all, I know they
are not as integrated or consolidated as they would have you believe. [One large
agency I worked for] couldn’t even get the general ad people to TALK to the interactive people. There were different account execs, different points of contact,
different strategies, all of which the client had to manage.”60 She continues,
[There was also] “a separate creative team, traffic manager, etc. That means they
use double or triple the resources they need to. And that costs money.” Therein
lies the problem: For clients, agencies with poorly integrated silos offer no advantage (not cost, not convenience, not expertise) over forming a team of separate
agencies—a strategy that allows them to chose the best in each field. We will
discuss the burgeoning use of this strategy in Section 4.2.
Internecine fighting not only works against the larger agencies, it completely undermines a key selling proposition of multinational agencies and holding companies.
Magliozzi, whose experience includes stints at two multinational agencies and
whose marketing needs now reach over 45 countries, feels that the international
agencies aren’t truly international; they are just separate offices strung together
under one umbrella. So why bother? “I truly believe that whether you have regional agencies that are different companies or one global agency with regional

59

Disciplinary Xenophbia. The Connection. Communispond, Inc. January 7, 2010.

60

Magliozzi, Alyson Young. Director of Marketing Operations at a privately held, New Hampshire-based apparel company. Interview November 20, 2009. North Andover, Massachusetts.

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offices it’s the same—separate companies that don’t share resources or information. So I don’t see a huge benefit to going with a global agency partner.”61
Stacey Minton, the Geneva-based Director of Management Communications at
Merck Serono volunteers that her experience bears this out. “[In theory it] may be
useful if they have a global agency network, but I haven’t seen that they have
found how to use the network effectively. I am sure the offices they have in Japan
do a great job for their Japanese clients, and the offices they have in NY do a
great job for their NY clients, [but they don’t seem to be communicating with each
other]. If they are talking about [the benefits of a global network] they seem superficial. They need to have more discussions among the networks.”62
To be fair, one multinational client (of the eight interviewed) did feel that networked agencies work well together, increasing efficiency and ensuring consistent messaging.63 And all eight considered that global reach is not only valuable,
but essential. Further, multinational clients are sometimes the ones loathe to cooperate. Paul Epner, former Director Healthcare Improvement of Abbott Diagnostics, recalls “Our European colleagues tend to think of themselves in their own
world, their own fiefdom with the need to do things their own way. Europe had its
own agencies, own creative, own media. At the higher levels, [management]
thought this was a waste of money, and tried to drive the use of a common
agency that has the skills and affiliates to meet local needs as well…but talking to
the agency, the locals were never satisfied.”64
Client territorialism may trip up some agencies’ abilities to work across national
boundaries, but it doesn’t explain silo-centric behavior. I believe the real issue in
both intra-agency and intra-“hold co” noncooperation stems from economic selfinterest. Again, “un-agency” Anomaly’s website is eloquent on the issue. “Holding
companies tend to be a collection of silo-like fiefdoms based on individual disciplines—the ad agency, the design group, the media department, the direct marketing division, etc.—that all have different P & Ls and agendas.”65

61

Magliozzi.

62

Minton, Stacy. Director Management Communications at Merck Serono. Telephone interview November 21,
2009.

63

Senior advertising person, UBS AG.

64

Epner, Paul. Director, Healthcare Improvement, Abbott Diagnostics. Interview November 11, 2009.

65

Anomaly website.

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That issue of profit and loss really gets to the core of the problem.
“Someone sells the network, but the companies never figure out how to make it a
smooth organism. At [my former agency], we always talked about our international teams but we didn’t really leverage them effectively—partly because there
were cultural nuances that got in the way. Partly because it was C Suite to C
Suite making the deal, and no one talked to the management team who worked
on the business; they had no sense of mission and no desire to work together.
And partly because there is the issue of how you are going to share the revenue.
[Financial issues] get in the way,” says Elaine Leonetti. “I see agencies acquiring
other agencies to extend their core competencies and I shake my head and wonder how that is going to work.”66
In practice, it doesn’t. Matthew Connor, Executive Director, Wunderman World
Health, describes a project his team won in part because they could access the
cultural expertise of a sister agency. But when it came time to do the work, the
sister agency was not…wholly cooperative. “Our client work was not a priority for
the other agency, even though in theory we were partnered. There is a human
component to it; these are not their bread-and-butter clients, so they are lowest
priority. It makes sense; why would they put their best talent on a client that is not
theirs?” Connor is in the midst of launching a new healthcare-focused agency for
Wunderman in Asia. He continues, “Turf wars are a huge issue, and a hindrance
to successful partnership. The trick is finding sister agencies with complementary,
not overlapping service offerings. Otherwise it gets nasty. An interesting dynamic
I am now discovering is the tension between local and regional offices, and the
ferocity of the antagonism at times.”67
Asked whether McCann Erickson’s offices really work together, Craig Markus
smiles. “It depends on the environment. When times are good, people feel more
fearless, which leads to collaboration between global offices.”68 The unstated
corollary: when bottom-line pressure increases, it’s every man for himself.

66

Leonetti.

67

Connor, Matthew. Executive Director of Wunderman World Health. Skype interview March 7, 2010.

68

Markus, Craig. Executive Creative Director/Executive Vice President at McCann Erickson & Tag Ideation.
Interview November 5, 2009.

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It is clear that the holding company system creates its own set of profit-based
issues. Take the Gillette account as an example. Chip Bergh, Group President,
Global Personal Care at Procter & Gamble, describes the situation thus: Gillette
uses a team of agencies—most, but not all, Omnicom affiliates—orchestrated by
BBDO. Gillette pays a single set fee, established in advance, that covers the full
scope of work—big, small, local, global, across all media. “BBDO has to divide up
the check into all those little pieces. Because Omnicom is a holding company,
each individual agency in the system has a profit goal they are held to.” In
Bergh’s view, “It stifles cooperation, because they need to worry about their bottom line—and under the current system no one ends up making as much profit as
they want.”69
Leonetti echoes Bergh’s insight, having faced this problem from the account side.
“My affiliate isn’t going to help my client in Singapore if he isn’t going to be adequately compensated, but if I price it so we both get a piece we will price ourselves out of the business.”70
Bergh posits, “If Omnicom thought more holistically—like a business in which not
all departments were expected to show a profit—then they would foster less
worry and more cooperation.” Tellingly, he believes, “Over time more companies
need to go to this model or the brands will go to more fluid networks.”71
To realize true value from multiple disciplines—whether within a single agency or
a holding company—it seems clear that the incentive structure needs to change.
Then even when people operate from a stance of pure self-interest, true collaboration can occur.
3.3.3

The compensation model

“Clients want more and want to pay less. And there is margin pressure. I don’t
think anyone has figured it out yet.”72
Senior Advertising Person, UBS AG

69

Bergh.

70

Leonetti.

71

Bergh.

72

Senior advertising person UBS AG.

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Agencies are in business to make money. Yet, if intra-agency incentive structures
need to change, so do overall agency incentive structures, also known as the
compensation model. Indeed, remuneration has become a hot industry topic and
was the subject of fiery debate at the September 2009 Agency Evolution conference. There, Alex West, Global Innovation Director at Mother, posited that “clients are looking to us for more interesting remuneration models. We have to be
inventive and push for fair reward for what we do.”73
3.3.3.1

The traditional model: Commission based

In the US, agencies traditionally reaped profits on commissions based on media
spending (in some countries, such as Brazil, this model still holds).74 As Keith
Reinhard, Chairman Emeritus of global powerhouse DDB Worldwide observes,
“Pay based on media was stupid from the start. We in the advertising business
brought this on ourselves; the commission system is flawed.”75 However, it hasn’t
entirely disappeared.
John Winsor, industry leader and CEO of new fluid network Victors & Spoils, observes, “The agency-of-record model is still loosely based on media spend—and
it is broken. When you have a client spending $300 million on media, that means
they are spending $30 million on creative, which has inherent issues. The client
wonders what they are buying that is worth $30 million and the agency thinks
they are working their asses off to get Super Bowl tickets for the [client’s] CEO.”76
That is not going to work any more.
Client dissatisfaction is a key reason media-based commissions have dwindled
over recent years, with percentage of sales declining: “first 15%, then 12%, then
10%.”77 Agency profits are another: As media choices shift from costly television
into less expensive digital media, the relative proportion of the campaign spend
allotted to media vs. creative also shifts. James Sherrett observes, “We are seeing the 80/20 flip in action—the spend for a campaign is flipping from 80% me-

73

Agency Future. Agency Evolution Report.

74

Markus.

75

Reinhard.

76

Winsor, John. CEO Victors & Spoils. Telephone interview March 1, 2010.

77

Bergh.

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dia/20% creative to 20% media/80% creative.”78 Facing a smaller percentage of a
dramatically smaller pie, agencies are strongly incented to find a new paradigm.
3.3.3.2

The traditional alternative: Fee based

With the decline of commission-based remuneration, fees for services—strategy,
creative, programming—have risen. Mostly these fees are hourly, though some
agencies charge flat fees—which have grown flatter in the current climate.
3.3.3.3

The client reaction

Clients are dissatisfied with both commission- and fee-based approaches. Sara
Sampson has seen the problem from both the client and agency view, having
served as Director of Marketing for Holiday Inns Worldwide and Pearl Vision,
Vice President of Sales for Lifetouch, and Senior Vice President of Carlson Marketing Worldwide. “I used to manage general agencies and they are dying, they
can’t reinvent themselves fast enough. I always look at their revenue model.
Years ago it was all in broadcast which was ridiculous. When I was at Pearl we
hired an independent media specialist, so we went to a fee basis, but I always felt
the fee was not as transparent as it needs to be. I felt like we were always paying
a lot of overhead. I struggled at Carlson to explain our fee structure to my clients,
because there was definitely a premium charge; they brought people in specifically to service an account which is a very expensive model.”79
If the current compensation model is broken, then what should take its place?
3.3.3.4

Option: Pay for performance

As an idea, pay for performance is gaining considerable traction. A senior advertising person at UBS AG, explains, “We are considering changing from laborbased compensation to value-based compensation; Coke has been the lead
force in terms of this approach. It’s the new way to think about it—a pay-forperformance component which I think most agencies want. It’s a fairly slippery
slope, though.”80

78

Corcoran, Sherrett commenting.

79

Sampson.

80

Senior advertising person, UBS AG.

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Why? If pay is tied to the value of your performance, how is that value measured? She continues, “The key is the appropriate metric that you as a client and
your agency agree on. From a creative standpoint that is more challenging than
from a media standpoint…both parties need to agree on what the metrics are.”81
In 1990 DDB attempted a variation of pay-for-performance called “Total Creativity, Guaranteed Results.” Reinhard explains that it failed for two reasons. “First,
‘Guarantee’ sounded like a stunt. Also, clients wouldn’t go through the rigor or
share data, so we couldn’t make the DDB role real. You need the client and the
creative director to agree on a very specific goal. You can’t just say ‘turn the
brand around’; that could mean:

Get new users by expanding the client base

Increase the perception of value so we can raise the price, or

Steal the competition’s clients

If you can’t identify the goal, you can’t measure success.”82
A decade later, in 2000, P & G was paying all agencies based on sales rather
than time or media buy. “The attitude is: if we have entrusted you with our brand,
you will get paid if the brand grows,” says Leonetti.83 Reinhard thinks this approach is right. “The client is taking a risk; we should share that risk—and also
share the reward. So if we are not on track in 6 months, we make a correction.”84
Today, one company I spoke with has put a risk-based model in play for both
their agency of record and their media company. It amounts to just 5 to 7% of the
total fee—but that means a ±10 to 14% swing in their profits. Of this swing, half is
based on quantitative metrics, the other half on qualitative measurements of everything from creative delivery to customer service.85

81

Ibid.

82

Reinhard.

83

Leonetti.

84

Reinhard.

85

Doran, Amie. Senior Vice President, Director of Advertising and Promotions, Citizens Financial Group.
Interview February 4, 2010, Westwood, Massachusetts.

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3.3.3.5

Trevania Henderson

Option: Profit sharing

Several people have suggested an analogous model, hedge-fund-like, wherein
agencies collect a management fee, and also have a stake in the business that
allows them to keep an upside from an increase in performance.86 Agencies are
interested and so are clients.
In 2008, when Zo Bjorgvinsson founded Dotbox he decided to test a profitsharing compensation model. The day we spoke, Bjorgvinsson had just inked a
new ecommerce deal with “a traditional Fortune 500 company. The contract dictates that we can participate in the offsite effort coming from our work, so we get
a percentage of sales. From my point of view, that participation will replace the
architecture of the traditional agency model.”87
He explained that for him, it was about growing billings without growing staff, a
strategy that leads to a healthier bottom line. “I started my own business because
I have a keen interest in a large Christmas bonus,” he laughs.
“I specifically do not want to build a company that is only a billable-hour business.
I don’t like it for a lot of reasons, among them that it is challenging to be a business that requires more and more people as you grow—and I want to grow the
business quite a bit. We want for half our income to be consultancy like a traditional agency and half to be equity [in the results of our work].”88
Of course, that can be easier said than done. Bjorgvinsson continues, “I do know
quite a number of creative agencies who tried to get clients to sign up but failed.
It is always hard to get new models to work; you have to get the financial contract
right [which can be very complicated].”
There are also questions from the agency view, notably that the success of your
client’s business correlates to a lot of things besides your work—from their product to their sales force or customer service reps to their basic strategy. So there
can be an issue if your earnings are tied to the success of the business.

86

Corcoran; Katie Smillie commenting, quoting Seth Goldstein, CEO at SocialMedia.com

87

Bjorgvinsson.

88

Ibid.

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Asked how that impacts his model, Bjorgvinsson muses, “Of course [with my
model] you don’t have control over many of [those issues]. If you are dependent
on the income of the client, what happens when their income gets cut in half because there is a recession? Given the basic business architecture, your business
is going to be cut in half too.” However, he doesn’t really think that is any different
than the situation now, in which budgets—and thus billings—rise and fall with
client profits. “It just renders more visual what is an obvious causal relationship.”
He does think it spurs the agency to be more proactive. “You fight more vigilantly
for what you believe to be right if your income is dependent on it. Also, you become better at articulating [your vision] and getting the right things chosen and
done.” Perhaps most importantly, “you get better at identifying the relationships
that you can manage. We try only to work with clients where we have two or
three relationships at different levels, both middle and upper management; we
specifically have said no to a pitch because we didn’t have those contacts.”89
3.3.3.6

The client role

Just as client dissatisfaction is driving change, clients themselves need to be part
of any fundamental shift. Laurent Ezekiel, Client Services Director for LBi thinks
they are not ready. “The reality is that the vast majority of blue-chip companies
are too structured to allow for any significant changes to the model.”90
Reinhard’s experience backs up that assumption. “Clients aren’t willing to create
budgets directly related to the objective. The budget says Advertising got X last
year, so they get X this year. In another room, someone is deciding the objectives. There has to be a connection between resources and outcome.”91 There
also has to be freedom to maneuver. When Maureen Suda was Director of
Communications at Eastman Kodak she found negotiations with her agency
hampered by internal regulations at her corporation. “I could have accessed more
cost-effective solutions, but I never had the opportunity. Purchasing had to meet
certain criteria.”92

89

Ibid.

90

Agency Future. Agency Evolution Report.

91

Reinhard.

92

Suda.

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3.3.3.7 Whither now?
Will pay for performance be the right solution for all agencies? Will profit sharing
take hold? Will clients be open enough to let either be a feasible solution? The
answers remain to be seen. But, reflecting on the fundamental changes described in Section 3.3.1 (What the agency delivers) it is clear that for agencies to
embrace a shift in marketing deliverables there will need to be a shift in incentives. If agencies are paid as a percentage of a media buy, they are incented to
buy more media—and to produce the creative for the most expensive media. If
they are paid by the hour, they are incented to take longer. If they are paid a flat
fee, they may be incented (or tempted) to cut corners. If their profit comes
through some form of partnership—or through some stake in their client’s success—then they are more incented to move product than to win awards. Where
an agency-client relationship strengthens to one of true partnership, surely both
the skill sets and the fee structure will shift too.
3.3.4

Egregious Excess: The mandate to do more with less

“Every time I walk into that big office in New York, I know I’m paying for it.”
President
Fortune 100 Company
“Money is never not an object.”93
Iesa Figueroa
Marketing Director, Insulet Corporation
Even in the go-go 90s there was pressure for clients to take fat out of their budgets. Then came the black days of October 2008, and “pressure” became “imperative.” Today’s economic realities leave no room for excess. As agency escapee
John Winsor remarks, “Today, CFOs are running the marketing department;
agencies are living on existing contracts, but they know those contracts will be
seriously renegotiated soon.”94
Bloat comes in many forms. The big offices. The fancy meals. The excellent Sky
Box seats. And the scores of people deemed necessary to service a big account.

93

Figueroa, Iesa, Marketing Director, Insulet Corporation. Interview September 30, 2009, Boston, Massachu-

94

Winsor.

setts.

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One particularly sharp-tongued blogger opined, “It is a well known fact that once
an agency signs a big account they ramp up, adding coddlers (typically mediocre
to barely-a-heartbeat type people) to fill seats and waste time on the multitude of
out-of-sync spreadsheets that end up floating around. This justifies the huge bill
at the end of the month.” She continues, “Smaller agencies of 15-20 people are
so much more efficient and cost-effective for brands to navigate these new waters we live in.”95
Winsor backs that assertion, noting that his network delivers dynamite creative
solutions for roughly 25% of the cost of the old model; he also recognizes that
agencies will be hard-pressed to cut 75% out of their own operating budgets.96
Clients are taking notice—and speaking up.
Sara Sampson, former vice president of a 2500-person agency, recalls, “[My firm]
found that they were constantly defending their cost structure to good clients. My
biggest client was Northwest Air. They were very cost conscious. It’s obvious you
are paying for overhead. You see the opulence, the offices, the perks.”97
Clients also object to the robust size of many agency teams. Theresa Kaskey,
Marketing Manager, John Hancock Financial Network, states, “If you are working
with a typical large agency system, you get good customer service, but it seems
like overkill. Even when you want to do a quick one-off project that you hope will
be inexpensive, you set up a kick-off meeting and there are eight or ten people
from the agency and you aren’t sure who they are and what they are doing.”98
The sentiment is echoed at UBS AG. “There is a question of how [agencies] staff
their accounts to get the work done. There are far too many layers that I don’t
need to pay for.”99

95

Exon.

96

Winsor.

97

Sampson, Sara. Senior Vice President Marketing and Business Development, Incentium. Telephone inter-

98

Kaskey, Theresa. Marketing Manager, John Hancock. Interview December 16, 2009, Boston, Massachu-

view November 22, 2009.
setts.
99

Senior advertising person, UBS AG.

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Michelle A. Heath, who worked at large corporations before her current start-up,
concurs, “Even if we were twice the size we are I probably wouldn’t choose to
use an agency. I wouldn’t want to spend the money to just have them push the
work around. It would have to be a unique type of agency that I haven’t seen before.” She sums up, “To spend half a million a year on a retainer for the sake of
having an agency [is stupid].”100
“Given that most agencies rely on the freelance talent pool to ebb and flow with
client demand, this gives [clients] significant [incentive] to cut out the middle man
and work directly with the same talent at a fraction of the cost.”101
Of course, most clients have neither the bandwidth nor the inclination to manage
hordes of freelancers themselves—they count on their agency for such project
management as much as for ideas. Just as obviously, for middle managers
whose agency-organized perks supplement mid-level salaries, the luxurious offices and front row seats aren’t extravagant; they are simply part of customer
service, a critical agency plus, as we will see later. As Sampson observes, “Some
clients like it; it makes them feel good that they are successful enough to warrant
it.”102
Yet it is interesting to note that, in my interviews, the more senior the client voice,
the more loudly it objected to anything that looks like waste. Perhaps they have
large enough salaries that the perks don’t make a difference to their lifestyles.
Perhaps they are secure enough that they don’t need the ego massage of a bevy
of fawning agency flunkies. Or perhaps it is simply that the buck stops with
them—and they would like to keep more of it for their own companies.

3.4

The critical components: What must remain?

“The best agencies will still have the best people, the best ideas and the best
culture. Good ideas will still be central to what we do.”103
Karina Wilsher
Managing Director, Fallon
100

Heath.

101

Fling.

102

Sampson.

103

Agency Future. Agency Evolution Report.

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Trevania Henderson

Both to market most effectively and to reap the largest rewards in today’s environment, many aspects of the traditional agency may no longer be essential or
even useful. But some aspects are fundamental to success, and as we consider
remaking agency models, we should be careful not to toss out the baby with the
bathwater. Over the course of my interviews, people pointed to several elements
they felt were important to success: knowledge of local markets, creativity and
expertise (whether in the client’s industry or in the marketing medium). Most important were relationships, both between agency and client and among the team;
nearly everyone deemed these crucial to success.
3.4.1

The client relationship

“P & G is old school. We are a big believer in relationships. We consider our
agency relationship to be a marriage.”104
Chip Bergh
Group President, Global Personal Care, Procter & Gamble
Across the board, my interview subjects agreed that large agencies have raised
the nurturing of client relationships to an art form. This helps them win and keep
business, though some comment that an overly comfortable relationship can lead
to complacency on the client side, which might result in less good work. However,
many people believe that the future of marketing lies in a strong partnership between agency and client—and that partnership will thrive under the care of
agency executives with deeply ingrained expertise in keeping their customers
happy.
3.4.1.1

Winning the business

Before an agency can work on an account, they have to land it. And people on
both sides of the table speak to the importance of relationships in winning business. “Certainly there is a question of reputation and the work presented in a
pitch, but when we became unhappy with our previous agency, we looked to a
group we knew,” says Paul Epner of Abbott Diagnostics. The incoming agency
president “had relationships with our senior vice president of pharmaceuticals,

104

Bergh.

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Trevania Henderson

our vice president of marketing, and our global commercial officer, so his agency
had an inside track.”105 Bevan Bloemendaal of Timberland has a similar tale. “We
were using six or seven agencies, but they didn’t come to the table with enough
strength. We chose a single agency that had more expertise—and an existing
relationship with our CEO.”106
3.4.1.2

Keeping the business

“There is still a lot to be said for the way big agencies are close to their clients;
they are very, very good at it,” says Lars Hemming Jorgensen, Partner, Chief
Creative Officer at the London-based powerhouse Story Worldwide. “They have
people who do nothing else; a client may have three people who just buzz around
them. And the clients who have the budget for that, like it.”107 Jennifer Brett, Partner at the two-man shop dot•content, remarks wryly, “Some clients need a larger
agency because they need a lot of handholding.” 108 Account executives tell tales
that substantiate this view.
“At Burson-Marsteller [a large PR agency] I used to take people to see shows
where the tickets were $900, which went straight on their bill,”109 remarks
Maureen Suda. Matthew Allen, Vice President and Account Director for Arnold
Worldwide also finds himself attending lots of events; he works on McDonalds,
covering the Midwest.
“Ten percent of this account is actual creative work,” says Allen. “The other 90%
is about client management. There is a fair amount of entertaining: dinners and
tickets to sporting events and theater. We put in lots of face time. There is a client-driven expectation that they will be taken care of.”110
For these clients, handholding is just good service. Of course, the definition of
good service may differ, client to client. Reflecting on her days as Director of Advertising for Holiday Inn Worldwide, Sara Sampson summarizes, “The older you

105

Epner.

106

Bloemendaal, Bevan. Sr. Global Director - Creative Services, Timberland. Telephone interview December 4,
2009.

107

Jorgensen, Lars Hemming. Partner, Chief Creative Officer, Story Worldwide. Telephone interview December
2, 2009.

108

Brett, Jennifer. Partner, dot•content. Interview July 16, 2009.

109

Suda, Maureen. Principal, Suda Communications, LLC. Interview November 12, 2009.

110

Allen, Matthew. Management Supervisor, Arnold Worldwide. Interview December 9, 2009.

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Trevania Henderson

get, the more you get the way [agencies build] relationships. It’s all wining and
dining. I am more interested in a swiftly or proactively returned phone call.”111
Interestingly, Allen says even the expectation of free tickets and lavish meals
varies by market, with a much higher sense of entitlement in Boston than in Minneapolis.112
To some extent this spoiled behavior on the part of clients may serve to inflate
their own self-importance—or to improve their lifestyle in a variation of padding
the expense account. Concurrently, it may mean clients fail to push for strong
work. As Suda says, “If a client wants familiarity, handholding, and the comfort of
having you nearby, they are not going to be the client that values the best of the
best. The best might not be in their back yard.”113 But, used properly, clientagency face time can be invaluable both for selling the work and for developing it.
3.4.1.3

Partnering for productivity

“An ongoing client relationship is beneficial; you are brought into the company for
meetings, and the resulting insights can really improve the work.”114
Joleen McFadden
Senior Account Director, RAZR Marketing
The client relationship isn’t all about good times; it is also about good work. “We
used to get an assignment and go into a black box and produce the answer. That
doesn’t work anymore,” says Deborah Lotterman, Executive Vice President,
Managing and Executive Creative Director, of 50-person agency LehmanMillet.
“Clients need to be part of collaborating with the platform; we need their insights.
We combine their knowledge of the market, the customer and the product with
our knowledge of creative—we really come together as two teams.”115
Koichiro Tanaka of Projector agrees vehemently. Spearheading a virtual team,
Tanaka swept the 2008 Cannes Lions with his Uniqlock project for Uniqlo, winning Interactive Agency of the Year, the Cyber Grand Prix, Gold and the Titanium

111

Sampson.

112

Allen.

113

Suda.

114

McFadden, Joleen. Senior Account Director at RAZR Marketing. Telephone interview November 23, 2009.

115

Lotterman, Deborah. Executive Vice President, Managing and Executive Creative Director. LehmanMillet, a
HealthSTAR Affiliate. Interview November 10, 2009.

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Grand Prix. Asked about his work process, he says, “When it comes to the creative process, having a relationship with the client [is critical]. The presentation
itself isn’t everything; show it to the client throughout. Bring in everyone’s ideas
and absorb them.”116
Graeme Dignan, founder and CEO at Erasmus Partners, summarizes, “We need
to get closer to and share common goals with clients.”117
But how? Craig Markus of McCann Erickson thinks it all comes down to trust.
“The most important thing is the value of the relationship between the client and
the agency. That has to be based on trust. Clients start out thinking that my
agency is doing great work—not doing what’s best for them. It takes a long time
to convince them that I care about them. Once I have earned their trust, I can find
my way to solving their problems. The best compliment I can get is, ‘He really,
really understands our business.’”118
If understanding the client’s business is beneficial, the inverse is lethal. Rebecca
Peterson speaks from twelve year’s experience fielding agencies for biopharmaceutical companies. “I am very interested in someone who strategically understands the essence of the company. They need to take the time to educate themselves and really listen to what we are saying. We have often had a situation
where an agency comes into the process with a preconceived idea. No matter
what you say, they already have a decision made. Having something fed back (or
worse regurgitated from work they have done for someone else) isn’t helpful.”119
Clients are taking steps to foster understanding and nurture partnerships. James
Tipple, UK Marketing Director for Yahoo notes, “We are taking a more collaborative approach…trying to phase out the project-by-project mentality and think more
coherently. We need to be closer partners with our agencies.”120 Phil Rumble, UK
Marketing Director for Cadbury’s echoes this sentiment: “I see an agency’s main

116

Tanaka, Koichiro, Projector. Interview January 30, 2009, Tokyo, Japan.

117

Agency Future. Agency Evolution Report.

118

Markus.

119

Peterson, Rebecca. Vice President, Corporate Communications, Alkermes, Inc. Interview July 17, 2009,
Cambridge, Massachusetts.

120

Agency Future. Agency Evolution Report

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role as working much closer with its client and acting as [a] purveyor of brand
ideas and as [a guardian] of brand behavior.”121
“As the person responsible for the brand, I will always have to be pretty involved
with whatever we are doing,” says client Michelle A. Heath. “I won’t ever be in a
place where I can just say ‘the agency is handling that.’ Frankly, I think that is
where brands get in trouble. They hand too much over to the agency and lose
touch with the people who are touching their brand, with what the audience
needs and what they don’t need, with what is changing. If the agency says ‘this is
a great idea,’ [as a client] you need to decide whether you agree based on what
you think is happening in the market now—not on what the agency thinks.”122
A final caution: When the team spans client and agency, the ecosystem can be
very fragile. “If one person in the relationship leaves, the whole thing is up for
grabs,” says Markus. He gives McCann’s efforts to maintain their relationship with
MasterCard as an example. “Joyce is credited with that campaign. She has a
relationship with the CEO of MasterCard. Even though she has been promoted,
she has never replaced herself as Executive Creative Director on the account. It
keeps her safe, it keeps the client safe in the building, you see it in the work
globally.”123
3.4.2

The team relationship

“What special skills do teams need? Trust.”124
Paige Arnof-Fenn
Founder, Mavens & Moguls
If it is important to form strong relationships with the client, it may be more important to form strong relationships within the agency. People from agencies of all
sizes (and around the globe) agree that nothing replaces the camaraderie, the
deep intuition, and for many, the spark of a team that has a long history together.
Felix Tataru, General Manager of the privately-held Romanian agency GMP Ad-

121

Ibid.

122

Heath.

123

Markus.

124

Arnof-Fenn, Paige. Founder, Mavens & Moguls. Interview July 10, 2009, Cambridge, Massachusetts.

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vertising specifies, “Team dynamics are critical between copy and art. When
good chemistry happens you keep it.”125
Craig Markus, representing the global agency view, believes that dynamic is a
key benefit supplied by the agency itself. “The team gets security from the
agency structure. I don’t lose people. It is my responsibility to create an environment in which they thrive.”126 At least one client I spoke with agreed, saying,
“There is an agency environment that fosters…creativity.”127
As a bonus, Deborah Lotterman, EVP, MD, ECD of a mid-sized specialty agency,
argues that established teams speed the workflow. “Chip and I have worked together so long we can finish each other’s sentences,” she says. “So when a problem comes in, we can take it apart and solve it quickly. We just say, ‘Remember
when we did xxx…’” Part of that power comes from the original selection of
teammates. You chose a partnership in which “you complement each other’s
strengths and weaknesses. I know Chip will ask about X and he knows I will forget Y so he covers it. When you pull freelancers together, there is a ramp-up time
and you don’t know if the combination will work; if I put the team together within
the agency, I know it does.”128
When even Pixar credits their success on having formed “a community in the true
sense of the word,” one with lasting relationships, one that is “the antithesis of the
free agent culture that reigns in Hollywood,”129 is there hope for those who have
not yet found their place?
Agency veteran Joleen McFadden says: Yes. “There is an advantage to having
worked together, but you can build [a strong team] pretty quickly if you get the
right people. If you have worked with someone before, you have instant credibility. If you haven’t, they will challenge you to the point where you satisfy them that
you are good at what you do. That happens at big agencies, small agencies and
on your own.”130

125

Tataru, Felix, General Manager, GMP Advertising. Interview April 6, 2009, Berlin, Germany.

126

Markus.

127

Senior advertising person, UBS AG.

128

Lotterman.

129

Catmull, Ed. How Pixar fosters collective creativity. Harvard Business Review. September 2008; pp. 64-72.

130

McFadden.

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Trevania Henderson

The four C’s

A number of elements that support good work—and good working conditions—
flow naturally out of the agency environment. Here, I dub them “the four C’s”: Culture, Collaboration, Continuity and Communication. Culture, if it is positive, not
only supports but breeds excellent work, as well as a happy, dedicated staff. Collaboration is, in many ways, an outgrowth of the team relationship, but it refers to
the need for many minds when searching for a strong solution. Continuity—a
team that stays together, with the project and with the client—also underpins
strong work. Communication, when outbound, is a corollary to the client relationship, but within a team is both the glue that binds and the grease that keeps work
moving smoothly. Each is essential to producing an excellent product.
3.4.3.1

Culture

Keith Reinhard, Chairman Emeritus of DDB Worldwide, wrote, “You asked what
the big agencies have that should be preserved or that would be missed in a
newer model: To whatever I said, I would add ‘culture’ and ‘continuity.’ I was
speaking with the head of one of the DDB offices who said his top concern is still
the DDB culture, preserving it and building upon it, because he believes it is culture that most differentiates one agency from another and he believes that culture
is important to clients.”131 This sentiment is rather reverse-echoed by a senior
person from another agency, who notes wryly, “The DNA of this agency is not
creative. It was started by account people which shows.”132
The critical elements to building and sustaining a culture would make a fine paper
of their own, but suffice it to say that the right culture can make a tremendous
difference to both agency and client.
3.4.3.2

Collaboration

“It is all about collaboration.”133
Carlos Alvarez Téllez
Innovation Consultant, Play Mexico

131

Reinhard.

132

Markus.

133

Alvarez Téllez, Carlos. Innovation Consultant, Play Mexico. Interview April 6, 2009, Berlin, Germany.

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Drew Jones makes his living through an innovation consultancy that helps companies tap into the creative problem-solving power of teams. It’s a subject he
knows a lot about. “Collaboration is critical to the generation and advancement of
ideas. Companies that are most innovative tend to have no more 42% of time
spent heads down working alone. About 40% of work one does should be solo.
Companies that come in with 80% [solo work] are average companies.”134 One
can only imagine that the need for collaboration is even stronger when creativity
is core to the business. To truly solve a problem requires some debate and group
probing; the ‘divide-and-conquer’ approach is simply not as effective.
Agency owner Felix Tataru observes, “People like to fight for a cause, so make
the agency’s creativity the primary focus, make it measureable. When there is a
dragon, use the whole power of the agency to slay it. It is not a [straightforward]
process and the answer may not come just from the creative team.”135
That is unquestionably true, but may not mean you need an entire agency to
solve a problem. Matthew May, author of The Seven Laws of Projects and How
to Break Them, observes, “If you have too few people on a project, they can’t
solve the problem. If you have too many, they create more problems than they
can solve.”136
The bottom line: accept good ideas from any source—and be sure to have a
large enough team to think through the problem at hand.
3.4.3.3

Continuity

“Clients still want the same team on their business and resist and hate changes
in personnel assigned to their business.”137
Keith Reinhard
Chairman Emeritus, DDB Worldwide

134

Jones, Drew. Co-founder Austin Coworking; co-founder Shift 101 (previously AquiferDesign). Telephone
interview November 10, 2009.

135

Tataru.

136

May, Matthew E. The Seven Laws of Projects and How to Break Them. Open Forum. Published September
28, 2009; downloaded October 24, 2009. http://www.openforum.com/idea-hub/topics/the-world/article/theseven-laws-of-projects-and-how-to-break-them-matthew-e-may

137

Reinhard.

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Matthew Clark, Global Marketing Director, Strategy Practice, The Boston Consulting Group, discusses stable client teams thus, “The question is: What does
the client want? In the marketing service world, consistent touch points are important to the client. Because so much time is invested in the ramp up, there is real
value in continuity. If you are launching a multi-year program, you want to form
one team through the whole thing…If a person has done a great job, the client
will want them back. If a person is busy with another client, then they can’t deliver.”138
With today’s job mobility, there is a hidden benefit to client-specific teams too. An
advertising executive at UBS AG notes, “Depending on how long the account has
been at a shop, the people in the agency may have more of a history than the
people in the marketing department. It is good that someone has it! In the agency
it gives you some staying power.”139
So how do you ensure they aren’t busy? One strategy is keeping dedicated
teams on staff, people whose time and attention is dedicated solely to each account. But in the “do more for less” economy, no client wants to pay agency staff
for the weeks they are “slow,” any more than they want their brand’s marketing
campaign to be predicated on the skill sets existing in-house. More frequently,
agencies (and independents) turn to the same people, without their being exclusive to the account.
Specialist-agency chief Deborah Lotterman says, “Most of our clients aren’t retainer-based, but we still keep their teams on wherever we can. We use the same
account planners, and definitely the same creative team as much as possible.
They know how to use the logo and they know where the landmines are.”140
Agency owner Felix Tataru thinks it is just good business. “We keep the same
team all the time on the brand, because then they understand it.”141

138

Clark, Matthew. Global Marketing Director, Strategy Practice, The Boston Consulting Group. Interview
November 12, 2009.

139

Senior advertising person, UBS AG.

140

Lotterman.

141

Tataru.

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Interestingly, in my interviews, several people who lead fluid networks mentioned
that clients never asked whether the people they bring together for an account
are likely to leave midway or whether they will be available for phase 2 next
year—whereas, at agencies that is often a client worry.
Peter Pappas of 8 Beacon Partners, says, “I have never heard a concern that the
team wouldn’t be consistent, [but] I had a meeting last night with a prospective
client who was frustrated about having gone through agency reviews, where senior guys come to the pitch, but then [once the account is landed, the client is]
dealing with people just out of college.”142
That client is not alone. Whenever agencies spy bigger fish, existing clients may
fall victim to a switch.
“I often find that you get better quality work from smaller mom and pop agencies
than from the big agencies, where you are saddled with 21-year-old vice presidents who don’t know what they are doing, and/or you start with a superstar who
gets pulled to another account. With a mom and pop shop, you get veteran advertising people who know what they are doing. Plus, what you see is what you
get,” says experienced client Rebecca Peterson.143
Maureen Suda, principal of a fluid network, agrees, “My clients never have questions about people shifting, whereas at big agencies it is always a question: Are
you going to bait and switch? One of the key value propositions I offer is that I am
going to be working on your account.”144
Bait and switch isn’t the only problem; sometimes people simply have moved on
to better jobs. As agency-veteran-turned-client Stacy Minton remarks, “The turnover rate at agencies is historically quite high, so you tend to go through account
teams; you are constantly having to rebuild these relationships.”145
So, consistency—and the commitment that underpins it—is important to clients.

142

Pappas.

143

Peterson.

144

Suda.

145

Minton.

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After all, it is the people themselves who really make the difference. “A go-to firm
is really a go-to staff, and when the staff changes the clients will follow them.”146
3.4.3.4

Communication

“You almost can’t have enough contact within the team or with your client.”147
Liz Wos
Former Senior Account Executive, Erwin-Penland
“I know this: If I want to keep a client, or sell creative, I go there. Big ideas can’t
be communicated over the phone; it requires face to face.”148
Deborah Lotterman
Executive Vice President, Managing and Executive Creative Director, LehmanMillet
“Business takes place around the world over the internet and on the phone; it is a
question of rising to the level of the medium and delivering.”149
Maureen Suda
Principal, Suda Communications, LLC
When Liz Wos was an account executive, she practiced constant communication.
“Internally, we had daily meetings and a lot of copying everyone on everything;
you may not read every email, but [they ensured] some familiarity [with the projects] so anyone could serve the client anytime. Then we had a status call with
every client every week, as well as daily phone and face-to-face meetings as
needed.”150
Everyone—agency and client, multinational and lone ranger—agrees that good
communication is essential to good work. From establishing the goal to providing
all the background data to bench-marking progress to getting input throughout
the process (ensuring that you don’t get to the presumed final presentation only
to find that you are completely off track) there needs to be a flow of information

146

Suda.

147

Wos, Liz, Director of Marketing, Better Banks and State Street Bank. Telephone interview November 9,
2009.

148

Lotterman.

149

Suda.

150

Wos.

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among the team and between client and agency. However, opinions diverge as to
whether that communication needs to be face to face—or whether teams that
operate virtually function as well as teams that are colocated.
Paige Arnof-Fenn, Founder of Mavens & Moguls, a fluid network, prefers for the
project lead and client to be face-to-face (“it is really nice when a virtual company
can have a physical presence”), but that “the rest of the team can work from
anywhere in the world.”151
Many believe, however, that virtual teams need to start off together. As Iesa
Figueroa, who has made the switch from agency to client, says, “Being in-person
is critical in the beginning, as you are building the relationship and trying to get
the team to cohere.”152 A chorus of others agree: “Remote works best when you
have been in the trenches with someone at some point.”153 “A previous relationship is more important if you are working remotely than if you are working in person.”154 “It is easier to work virtually if at least some members of the team have
been through the fire drills and the battles together before.”155
However, as Peter Pappas, fluid network principal, adds, “That is the same in an
agency. You always feel more comfortable and more efficient with someone you
have teamed up with and partnered with in the past. If it is someone new, there is
a learning curve.”156
Lisa Schiavello, Executive Creative Director at Red Door Interactive, voices the
next-generation opinion. “We have no issue with the team not being in the same
place. We are a digital company, creating strategies that are out there, so they
can happen anywhere. Our collaborative teams can use technology to close the
gap on traditional ways of meeting and working together. In fact, we encourage

151

She then illustrates the value of that geographic diversity with a tale about making time zones work to your
advantage. “Our client was in Bangkok; the team leader met with the client, then did an email brain dump.
When the people in New York and Boston woke up, the email was waiting for them. They worked until
lunch, then turned it back to the person in Seattle. By 9:00 the next morning in Bangkok, the client had work
waiting for them. They were amazed; we said we had people working round the clock.”

152

Figueroa.

153

Schiavello.

154

McFadden.

155

Pappas.

156

Ibid.

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employees to work remotely two to three days a week; we have WebEx, GoToMeeting, videoconferencing, and a dedicated website where we can dump
ideas, sort of a virtual war room…The days I work from home I am most productive.”157
“With the technology today, you can have virtual meetings like you are sitting in
the same room,” says Bevan Bloemendaal, Senior Global Director of Creative
Services at Timberland. “The new virtual meeting space that Cisco has is a fantastic means of holding meetings.” However, he notes, “TV does add some
pounds.”158
Matthew Clark of The Boston Consulting Group, offers a few cautions. “Videoconferencing is easier if you have worked together, but awkward anyway; sometimes you forget they are real people. Phone conferencing is even worse. People
wander off mentally, work on their email, etc. That is more true, the larger the
group. When you are just two people, everyone is equally on the hook for keeping it going; the more people that are involved, the more likely they are to tune
out.”159 Arnof-Fenn agrees that there are occasions when “you need to have the
people around the table,” generally in a war-room situation to access information
and keep client and team on task for a rapid turnaround.160
Clark concludes, “Gen Y may be more comfortable with [working virtually]. Still,
there is something to be said for being locked in a room. It’s like a secret sauce;
certain things are really hard to get without co-location.”161
Looking ahead, agency head Deborah Lotterman sees the world becoming more
virtual. “In five years the agency world definitely will be more virtual. I will be
working with someone in California and someone in Japan—but we will have
worked together a dozen times, so we’ll have a shared commitment, kinship, enjoyment, and trust. It is hard to get that over the phone.”162

157

Schiavello, Lisa. Executive Creative Director at Red Door Interactive. Telephone interview December 4,
2009.

158

Bloemendaal.

159

Clark.

160

Arnof-Fenn.

161

Clark.

162

Lotterman.

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In sum: Nearly everyone likes face-to-face communication at some point in the
process; the question is how much—and how crucial it is. Some deem it essential
for kick-off meetings, brainstorming, presenting work—and even simply checking
in on a projects’ progress. Some put it on a nice-to-have basis, noting especially
an inverse relationship between shared history and the import of current proximity. And some have fully embraced the digital age, citing the host of electronic
aides—from texts to video conferencing to cloud computing—that keep teams
deeply connected without ever even having met.
In my observation, the degree to which alternate means of communication can
effectively substitute for face-to-face interchanges correlates directly with the
group comfort level with digital technology. (NOTE: The word “group” is especially critical to this remark; everyone involved needs to be equally at ease). I
anticipate that with the ascension of the media-savvy Gen Y, the need for inperson meetings will dwindle, and perhaps evaporate. However, clear, constant
communication will remain fundamentally important to success.
3.4.4

Training and Tools

When discussing non-traditional, fluid or virtual agency models, proponents
nearly always promote the fact that their teams are built exclusively from seasoned marketing professionals. That begs the question: If traditional agencies
ceased to exist, where would the next generation acquire that seasoning?
Liz Wos, who is currently client-side, but was previously an account executive at
a large agency, feels the agency atmosphere is essential to strong marketing—
and that it is irreplaceable as an on-going training-ground and incubator. “You
need to be constantly around people just like you, people who are 100% marketing; I don’t think you can get that quality of thought outside an agency. Caterpillar
is here in Peoria, and they have a pretty humongous marketing department—but
it isn’t the same as an agency. They are surrounded by people who do tractors.”163

163

Wos.

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Another agency advantage: Agencies often offer their employees continuing education; after all, keeping their employees fresh and up-to-date in evolving technologies is a form of capital investment. Lisa Schiavello, Executive Creative Director at Red Door Interactive, describes “a speaker series that we host with experts from various industries. They give interviews and Q & A sessions.” Red
Door invites everyone to these sessions. “We share what we know. We feel like
information changes so rapidly.”164
However, several people felt that what is being learned (culturally, not formally) is
not necessarily beneficial. Describing her own transition from a 2500 person firm
to a 20 person firm, Elaine Leonetti says, “In a large corporation if someone isn’t
pulling their weight they can hide; you can’t hide here. We all have to contribute;
if you can’t step up and step in, there is no one to take your place.” She continues, “This is a huge culture shift; if you come with a habit of politicking from Corporate America, we aren’t that way. No one cares if you get to be VP or Director;
we don’t have those layers. Some people have difficulty accepting that—and we
have trouble accepting them if they can’t leave that baggage behind.”165
Clients can also resent having their money spent on training. As a senior advertising person at UBS AG comments, “Agencies traditionally have a hierarchy of
talent of different levels; it is how they train people. I am less interested in the
assistant AE; I want access to the right people [not the children]. More clients are
going to be like me, so agencies need to look at the model to make sure how
they grow their talent, without making it the clients’ job to be part of the training
program.”166
The bottom line here is that while hands-on training is clearly essential, and
agency advocates feel it is a benefit of the traditional agency structure, clients
don’t value it—or at least not enough to pay. In the new world, practitioners may
have to get their continuing education on their own.

164

Schiavello.

165

Leonetti.

166

Senior advertising person, UBS AG.

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3.4.5

Trevania Henderson

Global Reach; Local Knowledge

“Global brands will still need a global network to get a global reach. Will that always be the best creative solution? I don’t know.”167
Charles Hughes
Group Creative Director, The Clarks Company of North America
All marketing is local. So to be effective, it is clear that brands need a local presence. The question for clients working internationally—or even across the US—is
whether that presence is better established through a global network or through a
series of local partnerships.
“When we are [advertising] in Asia, and we want to know if the idea works in
China, we want people on the ground there—it is different. You start in English
and don’t translate, you transcreate,” says a senior advertising person at UBS
AG. But she is clear that those people need to be connected via the global
agency. “You need someone who understands the culture, who understands
UBS, who really wants to make the communications relevant. Working with a
local agency may be cheaper, but from a consistency standpoint it doesn’t
work.”168
Elaine Leonetti agrees that as a US-centric agency, her company cannot always
meet the needs of multi-national corporations. “Global clients often believe that a
large agency is the only one that can take them globally. In some instances they
are right. We cannot be all things to all people and we will admit that. Those
agencies have in-country offices that really understand the culture. It’s tough
enough to market domestically; we don’t have the bandwidth or experience to go
into international markets like a full service agency.”169
Manuela Amaro, Marketing Director, TAM Airlines, disagrees; she has switched
from a global agency to source essential local knowledge directly through individual agency partners, a strategy we will discuss at length in Section 4.2.2.4.

167

Hughes.

168

Senior advertising person, UBS AG.

169

Leonetti.

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Taking all this into consideration, it is interesting to note that of my interview subjects, only two multinational clients found value in global networks (and six listed
them as something that is “broken”), whereas four clients and nine respondents
overall deemed local knowledge critical. Speaking of his new Asian venture, Matthew Connor writes that “a local physical presence is critical for knowing the market conditions and servicing the client credibly.”170 Indeed, an ability to really access what local people think, feel and do is essential to marketing success—but
how that knowledge is best gained is open to debate.

3. 5

Conclusion to Chapter 3

As presented in Chapter 3, multiple data points—articles in business magazines
and trade journals, employment and revenue statistics, casual conversations and
formal interviews—show that the advertising industry is in a state of flux. The
economic debacle of 2008 may have hastened some shifts, but the true change
agent is the rise of the digital age. It has empowered consumers and thus
changed the way brands need to market to them, rendering it virtually impossible
for an agency to have up-to-the-minute expertise in all critical marketing silos.
Concurrently, it has enabled people to work from anywhere; anyone can access
the best expertise (and those experts can find their customers); teams can form
across geographic boundaries; and many of the interstitial layers agencies place
between the client and the work are no longer necessary. Lowering the body
count lowers costs, which is attractive to most clients in almost any economy.
Yet the question remains: What is the optimal agency model for this new landscape?
Both clients and agency personnel describe the facets of traditional agencies that
must change, and those that must remain. Most interestingly, the issues around
which there is general consensus are precisely those that new digital technologies either caused or can alleviate: the means of marketing, collaboration and
cost.
There is also consensus (if not absolute agreement) around the factors that are
essential to either good work or good business: strong relationships (both with

170

Connor.

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the client and within the team), the right corporate culture, clear communication,
and a combination of possessing local knowledge (and the ability to deploy it)
while coordinating efforts globally.
These data points then—both pro and con—form the framework for Chapter 4, an
analysis of four broadly painted agency models.

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4.0

Trevania Henderson

Analysis: Alternative Agency Models

“It is certain that if you were starting the business today no one would ever come
up with the model we have now.”171
Keith Reinhard
Chairman Emeritus, DDB Worldwide
“Different has already been done…whatever the model, it is bound to become
obsolete if it doesn’t constantly evolve and adapt to constantly changing demands.”172
Carlotta Brentan
Account Executive, Saatchi & Saatchi
Yes, the industry is shifting—but what comes next? Examining the current landscape of the agency world and the marketing universe, Chapter 3 identifies specific data points that are essential to any discussion of the industry’s future.
These break apart the agency eco-system into discrete concerns and considerations. In Chapter 4, those data points form the basis for analyzing the models
currently at work and some new models under consideration.
While there is an almost infinite array of variations in size, composition, expertise,
target client, and so forth, broadly, these models fall into four primary organizational structures:173

171

The large network/multinational agency

Specialized agencies that team to serve a client

Fluid networks organized by a small core team

Reinhard, Keith. Chairman Emeritus, DDB Worldwide. Interview November 5, 2009, New York City, New
York.

172

If I launched an agency. Campaign. Posted September 25, 2009; downloaded November 5, 2009.
http://www.campaignlive.co.uk/news/features/943002/I-launched-agency/

173

Some companies of course, prefer to keep the bulk of the work in-house. Describing his department, Charles Hughes, Group Creative Director at the Clarks Company of North America, says “We handle everything
from print ads to web design, emails, packaging, all the in-store signage, flash demos, 10,000 square-foot
trade show booths, every touch point imaginable. And we do not use an agency.” Hughes was formerly a
Creative Director at Pierce Promotions/Omnicom. “Having been on the agency side for many years looking
back, the agency brings a good deal of creative energy, but I think on the client side we have a better grasp
of the basic DNA of the brand in a way an outsider never can.”

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Virtual services, otherwise known as crowdsourcing

In the following pages we plumb these primary models, analyzing their strengths
and weaknesses in light of the core issues raised in Chapter 3. My belief: that the
successful agencies will be those that address the new marketplace realities and
embrace the new possibilities technology provides, while retaining the best facets
of the old order.

4.1

In defense of the large network/multinational

“This may be the time to destroy the vertical organizational structures, retrofitted
with ad hoc and matrix overlays, that encumber companies large and small…Turf
wars kill promising projects. Searches for information aren’t productive, and
countless hours are wasted on pointless emails, telephone calls and meetings.”174
McKinsey, Leading Through Uncertainty
December 2008, Bryan & Farrell
“You need a global network to protect a global brand.”175
Senior Advertising person
UBS AG
Prior to exploring the new models—which appear to hold the future of the industry—we should first consider the issues and advantages of the reigning model.
4.1.1

More than the status quo

“I think about the agency as an organism. It grows and changes. You add people
and shed people. But it has a process and a shared history, a shared knowledge.”176
Deborah Lotterman
Executive Vice President, Managing Director and ECD, LehmanMillet

174

Jones, Giles Rhys. Manifesto for a new Agency. Posted on Slideshare August 2009; downloaded November
17, 2009.

175

Senior advertising person, UBS AG. Telephone interview January 5, 2009.

176

Lotterman, Deborah. Executive Vice President, Managing and Executive Creative Director. LehmanMillet, a
HealthSTAR Affliliate. Interview November 10, 2009, Boston, Massachusetts.

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Although “everyone” agrees that the industry is in trouble, many voices confirm
the primacy of the traditional agency, stating that news of its death is greatly exaggerated. Not only does the traditional model offer the strengths outlined in Section 3.4—relationships, culture, collaboration, commitment, and communication—
it also offers a proven infrastructure that gives clients security.
4.1.1.1

Size Matters

Clients—especially those with national and multinational needs—count on heft
and breadth of reach to adequately deliver their message.
Amie Doran, Senior Vice President, Director of Advertising and Promotions, Citizens Financial Group, recently oversaw an agency review. Describing their selection process, she says, “The five agencies who made the cut were all pretty big;
we do 3,500 ads a year.”177 She needed to feel secure that the agency had the
infrastructure and resources to handle any amount of work she threw at them.
Global agency EVP/ECD Craig Markus agrees—the infrastructure matters to
global clients. “The network does help in serving global clients. It gives you the
resources to service the client, keep them engaged, and deploy the message.
Otherwise they all fend for themselves. The infrastructure is in place to service a
big client.”178
Notwithstanding the layers of bureaucracy, the seminal campaigns and multitude
of awards won by large agencies speak to the strength of the creative. As industry veteran Lisa Schiavello says, “A big company does as well for the client as a
small company. At Digitas the teams were so intimate it was like having a lot of
little agencies under one roof. With the right leadership you can get an excellent
product—and the parties are better.”179
Often, the budgets are better, too.

177

Doran, Amie. Senior Vice President, Director of Advertising and Promotions, Citizens Financial Group.
Interview February 4, 2010, Westwood, Massachusetts.

178

Markus, Craig. Executive Creative Director/Executive Vice President at McCann Erickson & Tag Ideation.
Interview November 5, 2009.

179

Schiavello, Lisa. Executive Creative Director at Red Door Interactive. Telephone interview December 4,
2009.

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There is another powerful incentive for clients to choose name-brand agencies:
the safety and confidence that comes from a name brand. Lars Hemming
Jorgensen has gone from being a shop of 40 to being a shop of 250—and now is
preparing to start again. Though he wants no more than 20 people at his new
agency, he believes his success will come in part through his “big agency background; [I am] safe for those clients who care.” He illustrates his point with a
story. “When we founded Large, there were just the two of us and we rented
space from another agency. If clients came to visit we would take the other
agency’s name off of the door, so they thought we were a real company—not just
the ‘Jim and Lars Show.’ People want to see that you are successful. They want
to buy into the success. Successful agencies with a big name will do a good job
because they don’t want to hurt their reputation. They have a brand. If an agency
of only 5 people messes up, then they just change their name.” 180
Jorgensen found even a 40-person group wasn’t substantial enough for some
clients, “When we started, no one wanted a 40 man company to do a big project.
When we [Large] joined Story, some clients gave us twice as much work overnight just because we now were 250. In truth we had not really quintupled our
capabilities; we had skills the others didn’t, so our guys were a little overwhelmed—because of course you say yes.”181
In short: To many clients, size matters—even when the capabilities are the same.
4.1.1.2

Internal Shifts

Still, the inherent advantages of the traditional model do not mean agencies can
or are maintaining precisely the status quo. Many agencies and agency groups
are making changes to address some or all of the issues presented in Section
3.2: the digital revolution, the reliance on metric-based measures of success, the
calls for greater cost-savings and new compensation models.
Nearly every agency worth the name has added digital capabilities of some kind.
For some, it is a new department, for others a skill set that is part of the core

180

Jorgensen, Lars Hemming. Partner, Chief Creative Officer, Story Worldwide. Telephone interview Decem-

181

Ibid.

ber 2, 2009.

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creative. As we examined in Section 3.3.3, many groups are exploring alternate
compensation models, including quantitatively measured performance-based
pay.
As for cost-savings, some big agencies are reorganizing their internal work flow.
For instance, one management consultant interviewed stated, “Leo Burnett is not
outsourcing creative but centralizing it. It used to be that the Detroit auto manufacturers would go to Leo Burnett in Detroit, they would handle the account from
beginning to end; they would figure it out together. Now the account people are
still in Detroit but creative is happening in central locations in different parts of the
world.”182 Presumably cost-savings stem from this shift.
4.1.1.3

Starting from scratch

“Innovation rarely comes from inside the industry. You become a conservative
because you have something to conserve.”183
John Winsor
CEO, Victors & Spoils
Some people believe that to build an agency that functions in today’s environment, you need to start from the ground up.
Creative legend Jorgensen notes that “lots of [new] multidisciplinary firms start as
on-line web agencies, then are transforming themselves into much bigger content
providers successfully. Because they are starting from a user-centric place they
are successful. Their approach is that power lies with the audience, so they need
to create content so good that the audience seeks it out. That is very different
from the mindset that we do something jazzy that gets attention when we blast it
out—and the buzz ends when media budget ends.”184
In founding R/GA Bob Greenberg took that idea one step further, creating an
agency “built from the ground up to meet the needs of digital age clients and
brands.” Indeed, the agency declares itself “The Agency for the Digital Age” and
Adweek named it “Digital Agency of the Decade.” Just as in a previous era agen-

182

Management consultant to Fortune 50 companies. Telephone interview November 24, 2009.

183

Winsor, John. CEO Victors & Spoils. Telephone interview March 1, 2010.

184

Jorgensen.

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cies built global businesses designed to market to the passive television consumer, R/GA has organized its capabilities to maximize marketing to the engaged
digital consumer, with three strategic disciplines and three creative disciplines all
married to technology and bracketed by account teams and internal production
capabilities.185
Clearly the R/GA format answers many of the issues posed by new media and a
new consumer attitude. These are not people whose standard answer is a 30second spot. However, the model does not seem to address many of the other
issues identified in Sections 3.3.2-3.3.4—top heavy teams, solutions that are
married to the skill sets found within the agency, the excess hours, expenses and
turf wars that come with layers of bureaucracy, or the compensation model. In
short, it appears still to be a traditional agency, albeit an agency for the digital
age.
4.1.2

Analysis

R/GA and other agencies show that the model can be remade to produce relevant content in the digital age. Yet as set forth in Sections 3.3 and 3.4, the structure itself—which intensifies in all ways good and bad in direct proportion to an
agency’s size—has inherent positive and negative attributes. Additionally, some
areas that either agencies sell as advantages or clients perceive as advantages
on closer examination turn out to be detriments. Yet, if the client believes they are
valuable, does the truth matter?
4.1.2.1

An expertise in establishing and nurturing strong client relation-

ships.
To succeed, any business needs solid long-term relationships with clients or they
expend proportionally far too much effort keeping the pipeline filled relative to
doing the work. People like working with people they know and trust. Agency account executives, for the most part, have elevated client service to an art. The
middle-manager decision makers enjoy the attention and perks doled out by large
agencies; it is their bosses who know the bill comes out of their budget, and so
who view the added luxuries as a waste of money. This is an undisputed strength

185

R/GA website. Accessed February 7, 2010. http://www.rga.com/about/featured/our-model

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of large agencies; while not impossible, such lavish service is more difficult for
smaller, less padded entities to achieve.
4.1.2.2

A sense of security as a trusted provider for clients.

Many clients find security in the large agency’s solid, organizational structure.
“McCann Erickson, Young & Rubicam, Ogilvy, etc. all benefit from their ability to
offer structure, proven success and large-scale solutions to big brands that
need…to feel safe about spending millions with an agency.”186 Sole-proprietor
Maureen Suda concurs. “Certain clients find that using a large multi-national firm
validates their own company. [For them,] even though I have the experience and
even if [an agency provides] more resources and infrastructure than the client
needs, I am not the right fit. It is a brand orientation.”187
Interestingly, this security may also extend to personnel. Perhaps because they
are less well capitalized, anecdotal evidence suggests that smaller shops have
had a harder time weathering the evaporation of business over the holocaust
year 2009. “Two years ago I interviewed for a project manager and I got 2 resumes; last month I interviewed for the same position and got 75. Most are people from small and independent shops; right now, big agencies feel safer.”188
4.1.2.3

A well-oiled machine

When everyone has clearly defined expectations and processes are in place,
there is far less possibility of things falling through the cracks due to human error,
fatigue or simple over-extension—there is always someone else to catch the
problem. However, all those checks and balances tend to slow production rather
than speed it, so it could be considered a mixed advantage.

186

Corcoran, Sean. The Future of Agencies: What do you think? The Forrester Blog for Interactive Marketing
Professionals. Posted November 16, 2009; downloaded January 2, 2010.
http://blogs.forrester.com/marketing/2009/11/the-future-of-agencies-what-do-you-think.html ; Arash Zafarnia
commenting.

187

Suda, Maureen. Principal, Suda Communications, LLC. Telephone interview November 12, 2009.

188

Magliozzi, Alyson Young. Director of Marketing Operations at a privately held, New Hampshire-based apparel company. Interview November 20, 2009. North Andover, Massachusetts.

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4.1.2.4

Trevania Henderson

An incubator of strong teams

Great ideas are often sparked by chemistry within the group—and the level of
comfort that can produce that chemistry may come from having worked together
over years. However, large agencies have many creative teams and not all are
equally talented. The EVP/ECD from a multinational agency tells me, “Especially
with big brands it’s my responsibility to make sure I have the most talented teams
working on their business. Of course, that means they may have to move off
other accounts.”189 The inverse is also true; as another former big agency
EVP/ECD notes, “Agencies say they pick teams who really fit the client, but there
are dogs in every agency who are shifted around from account to account;
someone ends up with them.”190
4.1.2.5

Dedicated teams that know the client business inside out

Clients feel that with a large agency they will get a team they can learn to love
and trust—and who will know their business better than they do themselves. And
to a certain extent that is true. Certainly agencies build teams for key clients. Certainly they try to hold onto those teams. And sometimes, the members of those
teams stay on the account far longer than the client’s own team members, making the agency the holder of all institutional knowledge. However, just as often,
team members are presented at pitches, used to produce the high level creative,
then moved on to other accounts. They also switch agencies, move, have babies
and retire—in short, are prone to all the forces of the work-a-day world. It is also
an open secret that agencies rely heavily on armies of freelancers and consultants to deliver the end products. And sometimes the consultant the client turned
down because the project warranted an agency, turns out to be the very person
the agency outsources to. Of course, “the client is unaware of the relationship.”191
Medical device marketer Iesa Figueroa is eloquent on the issues from the client
perspective. “The problem with an agency is that you don’t know who is doing the
work. You have 25-year-old account reps who take care of you, and they talk to
the people who are doing the work, so the creatives don’t understand what you
want. I would rather talk to the creatives myself…. Plus, your team changes and
there is no control on your part. The agency moves the good people onto a pitch

189

Markus.

190

Dawson, Karen, Principal, Two Blue Spruce. Interview November 13, 2009. Newburyport, Massachusetts.

191

Suda.

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because your account is stale. All the exciting stuff is over, so you get the dregs
doing your work.”192
Obviously, this is not the universal experience, but it certainly holds true in many
instances. I believe that other models deliver just as strong a chance of a lasting
dedicated team—with much more direct client contact.
4.1.2.6

A single integrated system that spans the globe

Global clients require a uniform brand message or experience “transcreated” for
local markets. UBS AG finds that “When you have a single brand that you want to
ensure has consistency around the world, it is more efficient to have one agency
than to have different agencies with different cost structures.” It is interesting to
note that this marketing executive still feels the need to use other agencies to
market specific product areas that require specialized knowledge, because “it is
not worth the time and energy to get generalists deep in a product area; a specialist is just more efficient.”193
More importantly, as we saw in Section 3.3.2, territorialism and economic disincentives often prevent global agencies from working as a whole. In short: while
global brands certainly need reach into all their markets—and may find it simpler
to execute via one agency—sometimes today’s global network may be better on
paper than in practice. This is an area of opportunity for holding companies going
forward, as Chip Bergh explained in Section 3.3.2.
4.1.2.7

Many levels of bureaucracy which slow production and add ex-

pense
No one likes bureaucracy. It frustrates creatives: “I find the AE’s are like a Chinese whisper; eventually after five times back and forth, you ask the AE to just
get out of the way and speak directly to the client.”194 “With agencies so much
time is wasted presenting ideas internally up and up and up a level.”195 It frustrates management: “At a big agency there are a lot of people touching the work

192

Figueroa, Iesa, Marketing Director, Insulet Corporation. Interview September 30, 2009.

193

Senior advertising person, UBS AG.

194

Jorgensen.

195

Dawson.

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who don’t add value to work product.”196 And it frustrates clients, both small
(“Firms that have full service are typically larger; I don’t want to pay for the overhead and I want to deal with the principals.”)197 and large (“[We don’t need the]
assistant product manager facing off the with the assistant account executive.
That’s too many layers that I don’t need to pay for.”)198
Clients are beginning to revolt against the bureaucracy. As one interviewee recounts, “MasterCard works with McCann, and they have a continual frustration
with red tape and not meeting deadlines. They may need McCann for the mass
media portion, but for a lot of other work, they are going elsewhere, to small
companies like RAZR [which is her company].”199 While the layers may stem from
positive developments—new clients, new expertise, greater oversight—in the end
they just slow things down—to the frustration of everyone involved.
4.1.2.8

A hard time thinking in new ways

Agencies form around their ability to deliver a certain thing—and should that thing
not be exactly what the client wants or needs, too bad. A former producer at an
agency with offices on four continents notes, “They are a big agency with a big
price tag and they always try to sell the product that they have. Why? It is what
they know how to do and it is better for them financially.”200 As Section 3.2.1.2
hopefully made clear, there is no place in today’s world for one-track thinking.
Today evolution occurs in the time it takes to gather the team in the conference
room; this then, may be the biggest issue with large agencies. Even assuming
the pace of change eventually abates, it may be too late.
4.1.2.9

Conclusion

Big agencies were designed to deliver creative via clearly defined media to a
passive audience. In the process, they developed many core strengths that the
industry would be fools to relinquish. Moreover, many clients and employees
want the security of an impressive organization. But the deliverables have shifted
to insights, innovation and creative across platforms and in ways only bounded
196

McFadden, Joleen. Senior Account Director at RAZR Marketing. Telephone interview November 23, 2009.

197

Sampson, Sara. Senior Vice President Marketing and Business Development, Incentium. Telephone interview November 22, 2009.

198

Senior advertising person, UBS AG.

199

McFadden.

200

Ibid.

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by imagination. And clients—budget constrained and anxious for their brands—
are going to be more proactive and less amenable, no matter how hands-on the
client service. Money spent will have to deliver results.
Will large agencies continue to exist? Absolutely. But they will need to evolve.
Discussing the state of the industry, Lars Hemming Jorgensen says, “People are
powering forward at incredible speeds. Some [agencies] will definitely break because they can’t hedge their financials on two big television ads a year. The second that all the big agencies crack, a new leaner, meaner, sharper ‘big’ agency
will emerge, one that is more aggressive and smarter about the people they
hire.”201 It is interesting to note that Jorgensen deliberately built his agency up to
250 people “because he craved the power rush” and is now leaving it to start a
new, nimble group with a maximum of 20 employees.
The industry is clearly trending smaller.
The challenge will be for individual agency powerhouses to recognize the need to
change. Commenting on an industry blog, Edinburgh-based digital planner Jim
Wolff writes, “Whether a scientific, technological, cultural or creative revolution,
the impetus to change hardly ever comes from the establishment, as they already
have vested interests in the status quo. It’s not until something new comes along
and really threatens that status quo that they make any significant changes, and
usually too late.”202
Once recognition occurs, actual evolution poses a further—perhaps insurmountable challenge. Many industry experts think reinventing an existing enterprise is
next to impossible—the issues are baked into the DNA. As Michael Conrad, Former Vice Chairman and Chief Creative Officer, Leo Burnett Worldwide, observes,
“You have to have the guts to shrink and start again, rather than trying to protect

201

Jorgensen.

202

Malbon, Ben. Where does the Agency end and the crowd begin? BBH Labs. Posted February 3, 2010;
downloaded February 7, 2010. http://bbh-labs.com/where-does-the-agency-end-and-the-crowd-begin; Jim
Wolff , digital planner at The Leith Agency, commenting.

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your turf.”203 Otherwise, you’ll find yourself out of business. Bob Greenberg, founder of digital agency R/GA, concurs. “People struggle with how to change from
one thing to another; especially traditional agencies. [Agencies] will need to
downsize then build up again from scratch. To do that, they need a visionary
CEO.”204 If they keep the people that are part of the problem, then Greenberg
doesn’t believe change can happen.
I believe change will happen—that some of the large agencies will succeed in
transforming themselves (albeit in a far more porous/transient configuration) and
splinter groups from others will form boutique firms and fluid networks which will
in turn grow and shift and mutate…perhaps only to grow large again.
4.1.3

A word on holding companies

Holding companies per se are out of the scope of this thesis, but it seems important to mention them here.
Tomorrow’s agencies may look nothing like today’s agencies—or they may look
very similar, with different labels on the department doors. Either way, the agency
itself is unlikely to disappear, and as long as agencies exist, holding companies
will too.
While they often position themselves as a way of bringing clients a fuller product
offering of “sister agencies,” implying creative synergy and cost savings, in truth
economics—the fact that each agency is ultimately responsible for its own bottom
line—currently works against any meaningful cooperation. As previously discussed, that could change, to the benefit of clients and agencies. However, holding companies’ true utility is as a financial instrument, a means of monetizing the
life’s work of the men and women who found and run independent shops. That
need—and thus utility—is likely to remain strong as long as people continue to
want to cash out of the businesses they start.

203

Conrad, Michael. Former Vice Chairman and Chief Creative Officer, Leo Burnett Worldwide; President of
the Berlin School of Creative Leadership. Interview January 20, 2010, New York City, New York.

204

Greenberg, Bob, Chairman/CEO/Global Chief Creative Officer, R/GA. Agency for the Digital Age. Lecture to
the Berlin School of Creative Leadership. New York City, New York. January 19, 2010.

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4.2

Trevania Henderson

A team of specialized agencies

In May 2007, Adweek reported that the majority of brands want to use an “open
source” model of agencies instead of a one-stop shop. Danielle Sacks, blogging
on Fast Company.com, noted, “As both the media landscape and consumers
become more fragmented, big bulky ad agencies like the BBDO’s and Y&R’s of
the world can’t get at the nuance required by marketers. Instead, cobbling together a customized team of smaller firms that flaunt expertise in areas like ethnography and digital, is the new buffet-style roster of choice.” She adds, “This
isn’t exactly what the Omnicoms and WPPs had in mind when they went off on
acquisition sprees, and this certainly isn’t going to help their bottom line.” Her
benediction: “May the best idea producers and executors win.”205
Three years and a lifetime of cataclysmic change later, we see the model proliferating.
4.2.1

Specialized agencies

“In general there is a trend towards people breaking into smaller specialized
groups.”206
Reed Deshler
Principal, AlignOrg Solutions
“ We need to be very specialized; there is opportunity between the frontiers.”207
Vicente Garcia
Planner & Creative Director, Kardumen Digital Sympathy
“It is hard to do it all in one place.”208
Amie Doran
Senior Vice President, Director of Advertising and Promotions
Citizens Financial Group

205

Sacks, Danielle. Report: The Open Source Ad Agency Model. FastCompany.com Posted May 14, 2007 and
February 8, 2008; downloaded October 14, 2009. http://www.fastcompany.com/blog/danielle-sacks/culturevulturist/report-open-source-ad-agency-model

206

Deshler, Reed. Principal, AlignOrg Solutions. Telephone interview November 24, 2009.

207

Garcia, Vicente. Planner & Creative Director, Kardumen Digital Sympathy. Interview April 8, 2009 Berlin,

208

Doran.

Germany,

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A corollary to the team of specialty agencies is the specialty agency itself. Industry specialization has long been the norm; there are healthcare shops, tech
shops, consumer products shops. Now specialization has spread to delivery
channels. Not only are there brand specialists, digital specialists, CRM specialists, and production houses—but even groups that only do the creative concepting, then let the client figure out how to implement it.
Commenting on a February 18, 2009 Advertising Age article Chris Arnold, of
Symple, London, writes, “A new talent incubator is about to launch in London. Not
only is it taking the best of the young talent and cultivating it, but it’s the first of a
new model of agency…a solus creative department (launching with 28
staff)…this new venture sells its talent worldwide to both agencies and clients
direct. It’s also set itself up as a ‘not for profit’ business, so it legally has to reinvest all profit back into talent…Within a week of its launch leaking out, over 200
grads had asked for interviews.”209
Anomaly is another type of specialty group. Founded 2004 they embrace an entrepreneurial business model, viewing creative ideas as intellectual property
which they license to clients, then find ways to execute. In some ways they are
similar to R/GA in having been created specifically to meet the new realities of
marketing; the difference is that Anomaly largely pulls together the resources
requisite for implementing their vision on a project-specific basis. As described by
Campaign, “[Anomaly’s] positioning sounds like a bunch of clichés, because so
many agencies are talking about the need to re-gear their approach around the
same principles: ideas-led, media-neutral, integrated, multi-disciplinary. Anomaly,
though, launched with these principles at its core.”210 As we noted earlier, in most
of life, when creating a new paradigm it is easier to start fresh than to recalibrate
old attitudes.
One Anomaly client remarks, “When they opened they were very unagency-like.
Now they have account people and structures and budgets—but their creative

209

Rooney, Jennifer, Laid-off copywriter turning blog site into job site. Advertising Age, May 06, 2009; Acessed
May 06, 2009.
http://adage.com/results?endeca=1&return=endeca&search_offset=0&search_order_by=score&x=4&y=5&s
earch_phrase=laid-off+copywriter+turning+blog+into+job+site

210

Anomaly website. Accessed January 3, 2010. http://www.anomaly.com

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vision hasn’t gone away.”211 This calls into question the practical balance between fluidity and scalability—at what point do the harsh realities of conducting
business war with the ability to keep an operation lean and unique? As Anomaly
grows, will it calcify?
Of courses the impetus for such agencies has come from client desires. At the
September 30 Agency Evolution event, Will Harris, Marketing Director of global
telecommunications behemoth Nokia, stated, “We’re looking at smaller, agile
agencies with smart people and cohesive offerings…we see the right agencies as
partners, not suppliers.”212 Since Nokia is the kind of brand that the multinationals
used to count on, this pronouncement is particularly notable as a harbinger of a
true industry shift—or perhaps it simply feels like the au courant thing to say;
Nokia has just signed with Wunderman Worldwide as their digital agency, which
makes one wonder about the sincerity of their interest in smaller agencies.213
Marketing Merck Serono worldwide, Stacey Minton definitely does spread the
work among many smaller groups. “I like working with different groups because it
pushes us [and pushes our thinking]. We work with three good agencies, plus
specialty agencies [for projects] like branding or reputation audit. As we bring in
more specialists we are seeing levels of expertise that we really like.”214
Blogging on the topic, Brad Abare perhaps best sums the client’s view, albeit as a
plug for his own company. “Do you really want an agency advising you to invest
your dollars in the campaigns they are staffed to create? Or work with a group
that is not actually staffed to implement the work, but rather one that is staffed to
advise you on the most effective route—then connect you to the most effective
implementers for the choice.”215

211

Client of Anomaly. In-person interview November 20, 2009.

212

Agency Future. Agency Evolution Report. Published September 30, 2009; downloaded October 14, 2009.
www.agencyfuture.com

213

Connor, Matthew. Executive Director of Wunderman World Health. Skype interview March 7, 2010.

214

Minton, Stacy. Director Management Communications at Merck Serono. Telephone interview November 21,
2009.

215

Abare, Brad. Ad Agency Model is Broken, Duh. Think Personality.com. Posted April 9, 2007; downloaded
October 14, 2009. http://www.thinkpersonality.com/archives/2007/04/gency_model_is.html

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Many clients—including Fortune 100 companies—apparently think in today’s
multi-channel world, assigning each piece of work to true experts is the prudent
move.
4.2.2

The concept in practice

“The marketing universe is expanding with the speed of light. Even multi-agency
groups find it too hard to keep track of the Big Bang that has been taking place in
channels and specializations. So, businesses need to work with multiple agencies to obtain best-of-class solutions in each field.”216
Marc Amaral
Writing on the Forrester blog for Interactive Marketing Professionals
This trend towards signing an agency of record (or doing your key thinking inhouse) then distributing tasks among a series of specialty agencies is similar to
today’s approach to medicine: You need a team of specialists to solve a problem.
Below are the ways some companies have used such teams—both from desire
and necessity and with mixed results.
4.2.2.1

Procter & Gamble: Brand Advertising Leader

Procter & Gamble is the world’s largest multinational consumer goods company
and the eighth largest corporation in the world by market capitalization. Headquartered in Cincinnati, Ohio, the company operates from hundreds of locations
worldwide and employs more than 138,000 people with an annual revenue of $83
billion dollars.217
Procter & Gamble has initiated a new system of working with agencies that is
being adopted by most of their global brands. Known as BAL (or Brand Advertising Leader), it begins with an agency of record which serves as the primary organizer for ideas and execution. However, the agreement insists that the agency
engage specialist groups in each area. Chip Bergh a Procter & Gamble Group
President, explains that “they are like the general contractor building a house.

216

Corcoran; Marc Amaral commenting.

217

LinkedIn website. Accessed and cited throughout the editing process, February-March, 2010.
www.linkedin.com

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They hire the roofer, the painter, the carpenter. They are expected to bring the
best talent to the business, and they are responsible for the result.”218
“We try for a network approach to solving our business needs. Our goal is to get
the best team we can get [for every brand] in every market. And it is a real team.
The players may come from different places, but they all have to play nicely.”219
The agency of record receives a single negotiated check to cover a laundry list of
initiatives. Their task is then to identify the best talent across multiple agencies to
ideate and execute the initiatives.
Bergh continues, “We have the right to veto a particular choice. Since we are
such a global brand it is important to have strong global capacity. Lots of these
specialized agencies don’t have the breadth; they may be really good in Northern
Europe but have no people on the ground in Latin America [in which case we will
insist on someone else]. Of course, in some specialties no one really has a global
reach, so we have two agencies.”
“Actually a lot of our best ideas are not from [the primary agency]—the traditional
source—they are from the other players.”220
4.2.2.2

McDonalds

McDonald’s Corporation, together with its subsidiaries, franchises and operates
McDonald’s restaurants in the food service industry worldwide. Its restaurants
offer various foods and beverages. As of December 31, 2008, the company operated 31,967 restaurants in 118 countries, of which 25,465 were operated by
franchisees; and 6,502 were operated by the company.221
“If McDonald’s had their way there wouldn’t be 150 agencies,” states Matthew
Allen, vice President and Account Director, Arnold Worldwide. Allen is in charge
of Arnold’s work on the McDonald’s account throughout the Midwest United

218

Bergh, Charles V. Group President, Global Personal Care, Procter & Gamble. Interview December 15,
2009, Boston, Massachusetts.

219

Ibid.

220

Ibid.

221

BusinessWeek Company Overviews. Accessed February 9, 2010.
http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=27003

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States. He explains that the Midwest includes 16 markets. Two large agencies
team with a patchwork of local agencies to produce the work, delivering truly tailored promotions on the same product. Two additional agencies and a national
CM firm work on the account from a national perspective.
“The franchisees are really important, and Leo Burnett (one of three agencies
responsible for national advertising) doesn’t know that much about Boston, or
Nashville or Ashville. The local agencies do creative with a local feel. That is especially important for a brand like McDonald’s, which doesn’t feel very local.”
The agencies are expected to work together. “We share calendars, successes,
creative. If something is working well in one area. McDonald’s expects we will
share with the others. They own whatever we produce.”222
4.2.2.3

Citizens Financial Group

Citizens Financial Group, Inc. is a $160 billion commercial bank holding company. Headquartered in Providence, R.I., it operates in 12 states across the
northeast of the United States.223
Amie Doran, Citizens Senior Vice President, Director of Advertising and Promotions, is clear that to reach today’s customer, the thinking has to be broad. “For
any company today to be thinking that they are doing a good job, they need to be
thinking of every media outlet.” She believes that is virtually impossible within a
single agency, explaining, “When we were paying for creative development, online ideas were always out of scope and cost-prohibitive—they weren’t part of the
retainer, so the net result was [either we didn’t use them or they were very expensive].”224
Thus, after a ten-year relationship that never went under review, Citizens Financial recently decided to move away from their agency of record, a $1.5 billion
agency with offices in 75 countries. While they have retained a similar agency as
their agency of record, they have now decoupled media and production, citing

222

Allen, Matthew. Management Supervisor, Arnold Worldwide. Interview December 9, 2009, Boston, Massachusetts.

223

LinkedIn.

224

Doran.

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specialists’ ability to deliver greater cost savings and expertise. They also have
unique partners for merchandising (both interior fixtures and promotional signage), direct mail, online and advertising AOR.
As Doran notes, while there is an opportunity for greater cohesiveness when
brand/marketing communications strategy is managed out of a single shop, in
reality specialized and boutique shops deliver greater competency at lower cost.
“This suggests a real opportunity to consider other models for managing and
outsourcing to partner agencies as ‘back office’ shops—realizing the best of strategic integration with expertise and efficiency.”225
4.2.2.4

TAM Airlines

TAM is the leading domestic airline in Brazil, flying to 42 destinations in Brazil
and 18 destinations abroad; it reaches another 35 destinations through regional
alliances and a subsidiary. 2006 annual revenue was pegged at 7,345 million
BRL. TAM was the first Brazilian airline company to launch a loyalty program.
Currently, the program has over 5.5 million subscribers.226
With destinations in 18 foreign countries and code-sharing partnerships that link
to 64 more, TAM Airlines needs to market broadly outside Brazil. But they have
found greater precision, flexibility and cost-savings by working directly in each of
those markets, rather than through a single global agency.
Manuela Amaro, TAM’s Marketing Director, explains, “It is a big mistake to talk
about the economics of being serviced by a global agency; the global communications are all that ‘blah, blah, blah.’ That is why I just broke my global contract.”227
Instead, TAM has built a platform for partners to act locally, developing a single
communications strategy through their Brazilian agency, then giving it to the local
partners to transcreate.

225

Doran.

226

LinkedIn.

227

Amaro, Manuela. Marketing Director, TAM Airlines. Interview April 9, 2009, Berlin, Germany.

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“Local partners will be true partners, a source of market intelligence. They can do
market research, identify PR opportunities, make sure our ads are culturally appropriate and translated properly.” For Amaro and TAM that deeply localized expertise can make all the difference. The bonus: “It is less expensive than the
global agency because the overhead is much lower. By switching from a global
agency to local partners, I saved 40% of my budget.”228
4.2.2.5

An Apparel Company

This corporation designs, manufactures, and markets athletic footwear and apparel for men, women, and children in the United States. It is privately held and
sales figures are not available.229
“Big agencies don’t offer out-of-the-box thinking,” states Alyson Young Magliozzi,
Director of Marketing Operations for this major apparel company. So even though
they market internationally, they choose not to use an international agency. “An
international agency would have no perceived value; their ideas are too staid.”
She continues, “[My company] is very non traditional. We do very little advertising. We don’t want to be seen as a mainstream marketer; we want to try new
things.”230 So, they develop a strategy in-house, then use an agency that develops the brand marketing platform.
“This year they are shooting a documentary on creativity around the world. They
pull together the team—director, crew, post-production ad promotion—and magically make it happen. We don’t look much behind the curtain.”231
The company uses a separate agency for their digital work and a team of regional design agencies to offer local in-store support. Why? “The same reason
you put together teams: to get the best expertise for each job.” They have recently switched digital firms. “The previous agency was small, but bandwidth
didn’t seem to be the problem. The issue was they were order fillers, not creative
thinkers. They didn’t understand the new tech. [My company] lives in the digital
space; we needed someone who could do that too.”232
228

Ibid.

229

BusinessWeek Company Overviews.

230

Magliozzi.

231

Ibid.

232

Ibid.

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4.2.2.6

Trevania Henderson

The agency perspective

Sara Sampson is Senior Vice President Marketing and Business Development,
for Incentium, a leading provider of employee, customer, and sales channel incentive and loyalty programs to the Fortune 500 and top tier emerging businesses.233 She both encourages her clients to use the multi-agency model and
has found it valuable herself. “We made a strategic decision that we don’t want to
do everything for everyone. So if our client wants complementary services, we
recommend other agencies they can go to for strategic consulting, back-end data
analytics and so forth. We do the actual program management, but we farm out
the bookend stuff. We do not currently get a revenue stream from our referrals; it
remains to be seen if we actually establish a revenue agency.”234
Sampson’s attitude is born of her own experience. “We are starting to get really
involved in revamping our enterprise website and when looking for help, even
there we found pockets of expertise. We found one person for content, another
for architecture and another for search engine optimization. It will require that we
hire someone senior to be able to mange the agency relationship, but I would
much rather do that then try to find it under one roof, I know that there are agencies that do it all, but I am not sure that I am getting the best, especially in areas
like the web where everything is moving so quickly. I want someone whose life it
is, who has to stay current because that is their bread and butter.”235
Sampson’s bottom line: “Clients are smarter today, so they know what they need,
and they would rather buy specifics.”236
4.2.3

Analysis

Having seen examples of various configurations of teamed agencies—whether
under their own aegis or the client’s—we should examine how well those configurations work against our established metrics.

233

LinkedIn.

234

Sampson.

235

Ibid.

236

Ibid.

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4.2.3.1

Trevania Henderson

Multiple touch points for the client

In this model, where there is a lead agency, the primary client relationship rests
with it. The other agencies will certainly interact with the client, contributing to the
overall client experience—and their own security on the team—but the burden
rests with the lead. Hopefully they are well-schooled in the care and feeding of
clients; if not, the relationship may be short-lived.
Of course, this arrangement perforce cannot be as seamless for the client. They
need to be involved in decisions around which other agencies to partner with, and
in some instances will be the one orchestrating the partnerships. However, Stacy
Minton, who has chosen a multi-agency model for biotechnology giant Merck
Serono’s global communications, doesn’t feel such juggling is any extra work. “I
am managing a host of projects that are quite different, so managing different
agencies is not a big deal. [I would rather have the right expertise] than the convenience of a single agency; I am not convinced that a single agency has the
best of anything.”237
4.2.3.2

The security of true expertise

The beauty of this model is that each part of the marketing plan is executed by a
group chosen specifically for their expertise and ability to deliver the best results
in that sector. It is, in essence, a model built on delivering security. As the model
attains longevity, strong lead agencies will arise as brands unto themselves,
brands that clients can turn to with confidence, knowing they understand how to
orchestrate multi-agency partnerships and get the best out of each team member.
4.2.3.3

Long-standing teams that understand the client

Assuming the right agencies are chosen, the configuration works and the work is
strong, there is no reason the bulk of the “team” shouldn’t continue to work on the
account for years. Some agencies will add or subtract depending on the type of
work needed, just as departments may or may not be involved today. And some
personnel will move to new agencies—perhaps taking the account along with
them—again as happens today.

237

Minton.

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4.2.3.4

Trevania Henderson

A client-driven expectation of strong teamwork

As Michael Conrad observes, “Today you don’t have to have the expertise; you
have to have a huge appetite in terms of collaboration.”238 Teamwork is an essential factor in this organizational framework. Because the impetus here is clientdriven (rather than one agency selling in its expertise via sister-agencies on
which it then has to rely) inter-agency teams are strongly incented to work well
together. Presumably when partnerships work well, the agencies will team again
on future efforts, and team members will reap the benefits of continuity and prior
relationships. But even when they are single engagements, agencies cannot afford to indulge in conflict, back-biting or passing the blame. Clients expect everyone to be united on their behalf. Careful organizational structuring and appropriate financial incentives will further ensure that all teams actually team.
4.2.3.5

Potential interagency cultural conflicts

Varying agency cultures provide a critical corollary to strong teamwork. When
working within a single agency, there is a single governing culture. Bringing together several agencies means multiple cultures need to interact. Open the business section of any paper and you can read about promising mergers derailed
due to cultural conflicts; the same issue may occur in this model.
Agencies need to be partnered as much for their compatible cultures as for their
expertise—and the people who will actually be doing the work (rather than C
Suite to C Suite) need to be part of the decision process.
4.2.3.6

Leaner, quicker, less bureaucratic—and maybe more cost-effective

“I want to break up the agency into small boutique groups; even the big clients
want to work with small agencies now.”239
Adrian Botan
Chief Creative Officer, McCann Erickson Romania
Smaller agencies have fewer layers, processes and people. That means things
happen more quickly, with less red tape and likely lower overhead. Of course
someone—either internal to the agency or to the client and probably both—needs

238

Conrad.

239

Botan, Adrian. Chief Creative Officer, McCann Erickson Romania. Interview March 31, 2009, Berlin, Germany.

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to oversee and coordinate the efforts. That adds complexity, but complexity with
a clear purpose.
4.2.3.7 New-media savvy, media agnostic approach with global reach and
local knowledge
When you build the team, you get precisely the expertise you need. That’s the
whole point. If you need feet on the street in Shanghai and Des Moines, you find
a partner with feet on the street in Shanghai and another in Des Moines. If you
need to tell a story on mobile phones, you get master storytellers and mobile
specialists. And if you are looking for a great 30-second spot, you get the top
scriptwriters and videographers.
4.2.3.8

Conclusion

With the shifts in consumer-driven marketing, there is a need to integrate a wide
range of skills, with concurrent pressure to deliver them at the highest level. Describing her bank’s advertising needs, Amie Doran says, “We need merchandising, online, direct, and advertising.” And that doesn’t begin to include all the other
services and touch points. She continues, “Agencies need to be really good at
the things they say they are good at. So pick a specialty.”240
Industry veteran Michael Conrad agrees. “It is a mistake to try to integrate all disciplines. Think about what we are covering in [the Berlin] School; it is not possible
to have it all under one roof and still deliver to the highest standards.”241
In Section 4.1.2.9 we concluded that agencies will always exist—but that many of
the large agencies will not exist in the same configuration as today. There is also
clearly a trend towards a smaller profile, and towards specialization.
So the idea that one agency will handle the organization and then parse work out
to the best specialists seems to work brilliantly to deliver the scale, the security
and the flexibility that the big brands need to market in today’s environment.

240

Doran.

241

Conrad.

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Doran adds, “The ultimate goal for the client is to deliver a cohesive brand message across all touch points. No client will be convinced that any one agency can
do everything with cost-efficiency and strong brand dynamics.”242
Holding companies may be able to transition into the model of teaming agencies;
they already have the talent in their embrace. But again and again people on the
inside say that an ability to intermingle strengths, sharing expertise among sister
agencies, is less valid in practice than in theory, primarily due to the economic
model; pressure to meet individual profit goals deeply undermines any interest in
expending resources towards someone else’s project. For the individual agencies
to team in this way, they need to approach the economics as though there is no
umbrella group, and negotiate deals that work in everyone’s favor financially. In
short: They need to build networked organizations, not simply be organizations
within a network.

4.3

Fluid Networks

“All you need is an idea and a team.”243
Koichiro Tanaka
Projector
Winner of 2008 Cannes Lions:
Titanium Grand Prix, Cyber Grand Prix, Gold and Interactive Agency of the Year
“A few people who are very talented at getting the best creative out of others,
plus some administration—that’s your agency.”244
Shaun Abrahamson
Founder & CEO, Colaboratorie Mutopo
“The experience has been great. I have access to the people doing the work, I
work only with principal level people, there is no issue of dealing with ‘the children.’”245
Iesa Figueroa
Marketing Director, Insulet Corporation

242

Doran.

243

Tanaka, Koichiro, Projector. Interview January 30, 2009, Tokyo, Japan.

244

Abrahamson, Shaun. Founder & CEO, Mutopo. Interview March 5, 2009; November 4, 2009.

245

Figueroa.

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Specialized. Nimble. Media agnostic. Cost-effective. These are the watchwords
of the new marketing ethos. Answering the call: a burgeoning crop of fluid networks, organizations anchored by a few strategic thinkers and/or creative leads,
supported by a virtual army of ideators, creators and producers of every ilk.
4.3.1

The fundamental idea

“There are hundreds of marketing applications that can help build brands and
impact sales. But it takes a nimble, flexible enterprise that does not rely on the
payment of media commissions to bring these alternate vehicles to bear.”246
David Sklaver
former president of Wells, Rich Greene
As the roster of marketing options grows, clients are looking for increasingly specialized talent. It is neither economically practical nor realistically possible for
agencies to keep that deep a bench in house, simply awaiting possible deployment. Meanwhile, leading talent worldwide has discovered the adrenaline rush of
a workday spent untangling creative problems rather than red tape. The two
forces, underpinned by technology that enables people and projects to work as
seamlessly from neighboring continents as from neighboring cubicles, has given
rise to a new agency model, described here as the fluid network.
In this model, the agency has a lean internal team, people who attract and liaise
with clients, then build and direct the team. The team itself is entirely outsourced—sometimes it is a “walled community” of carefully vetted contributors, sometimes an open call on the web. Whether other core functions—such as administration—are also outsourced varies from group to group as does the question of
how they work (whether virtually or in person).
From the client perspective, the model has the flexibility and cost savings of hiring freelancers (or crowdsourcing), yet brings the strategic thinking, high-level
creative and single-touch-point convenience of an agency. With certain groups it
even delivers consistent teams that understand and nurture the brand, as well as
the security of a recognized and respected practitioner in the lead.

246

Sklaver, David. From consolidation to innovation. Brandweek; 05/10/99, Vol. 40, Issue 19; p. 36-37;
http://web.ebscohost.com/ehost/detail?vid=1&hid=114&sid=7e

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Organizational design consultant Reed Deshler, a principal at AlignOrg Solutions,
explains the value from the customer perspective. “The networked or virtual organization model is common and I think it makes sense in many contexts. Virtual
organizational models are used for a couple of main reasons. The obvious one is
cost. It doesn’t make sense for firms to hold all capabilities in house. Second, you
meet a customer’s integration need if you bring experts together to deliver a
needed solution; otherwise the customer has to shop on their own to find ways to
meet all their needs.”247
Indeed, clients embrace the model.
Theresa Kaskey is responsible for John Hancock’s external communications.
Introduced to the fluid network model, she enthuses, “This is the perfect idea for
me; I get a diverse set of skills and a good price point. The reason that we don’t
use freelancers is that it is hard for me to manage my projects and manage the
freelancers…I just can’t do it—having to call the designer to make sure they have
talked to the copywriter. So someone who stands between me and the talent is
ideal.”248
Rebecca Peterson, Vice President of Corporate Communications at the Cambridge-based biotech firm Alkermes, is responsible for presenting her company to
Wall Street, potential pharmaceutical partners, and the patient population. Facing
this fluctuating set of marketing challenges, she dislikes having to pay a retainer
to agencies “whether you are using the people or not.” But she is pleased to have
someone else spearhead the efforts. “I am a big advocate of [the model]. If I hire
someone to do the web design, I don’t want to have to find a host, an information
architect, a UI specialist, and a writer...being sent to a trusted resource (and not
having to do the legwork or organization myself) is valuable.”249
Ally Polly, who is in the midst of launching a fluid network of filmmakers—
appropriately named Filmaka—sums up the advantages. “Clients love that we are
247

Deshler.

248

Kaskey, Theresa. Marketing Manager, John Hancock. Interview December 16, 2009, Boston, Massachu-

249

Peterson, Rebecca. Vice President, Corporate Communications, Alkermes, Inc. Interview July 17, 2009,

setts.
Cambridge, Massachusetts.

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virtual. Because there is no overhead for them, it allows us to work in a costeffective way. Yet, they don’t have to deal with the personalities and drama. The
whole process is still gone through, but we do everything for them.”250
4.3.2

Whence the workforce

“The most important thing is generating the right people and figuring out how to
incent them.”251
Shaun Abrahamson
Founder, Colaboratorie Mutopo
Of course, any endeavor is only as successful as the people involved. So two key
questions in a fluid network are where and how you build the team—the sources,
the filters, the incentives and the oversight.
Recalling his accession as head of Publicis, Maurice Levy remembers asking
founder Marcel Bleustein-Blanchet for advice. “I put to him the question, ‘What is
the most difficult thing in our business?’ He said, ‘Casting. Finding the right people to put together on a team, and finding the right team to put in front of the client. There must be chemistry, a good relationship, and one in which people can
work and trust each other. That is what makes our job more complex than any
other.’”252
Clearly, if that is true at the holding company level, it is even more true when the
team is custom-built. And before chemistry can be adjusted and relationships
built (both addressed later in this section) the first step is to find the right people.
For fluid networks, there are currently three excellent sources of manpower: people fleeing the corporate world, people forced out by the economy, and people
who never wanted a “real job.”

250

Polly, Ally. Head of Strategy and Brand Partnerships, Filmaka Entertainment Studios, a virtual community of
directors, writers, actors, and other creative artists from over 150 countries. Telephone interview February 3,
2010.

251

Abrahamson.

252

Kanter, Rosabeth et al. Publicis Groupe: Leading Creative Acquisitions. Harvard Business School case 9506-010. Rev. May 17,2006. Pages 1-24.

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To be crystal clear, in each of these instances, we are not discussing people who
are looking for part-time work. We are discussing people who work full-time, just
not in a traditional office setting (and not for a traditional corporation).
4.3.2.1

Hot Senior Creatives

“I had the dream job. The corner office, 175 people reporting to me, a company at
the top of its game. And it was soul deadening. I felt like a princess trapped in a
golden cage.”253
Karen Dawson
Principal, Two Blue Spruce
Former Executive Vice President, Executive Creative Director, Digitas
Writing for Brandweek in 1999, David Sklaver, former president of Wells, Rich
Greene, describes a dramatic flight of talent from ad agencies and marketers
alike, fueled by the massive consolidation in the ad industry. His view? As one
large marketer after another acquires brand after brand and agencies small and
large are gobbled up by global holding companies “the talented, risk-taking, ideagenerating executives…find they can make more of an impact working for themselves.”254
Sklaver continues, “Creating new paradigms for the agency of the future, we are
abandoning bureaucracies in favor of hands-on, down-and-dirty work, and we’re
hiring fellow exiles to help us. The allure is in the chance to work directly with the
decision makers without internal politics and to see their work produced instead
of reviewed, edited and ultimately deemed ‘too risky.’”255
Ten years later, the result is a robust talent pool of “big guns for hire,” senior-level
practitioners with the chops and credentials to impress clients and an appetite for
innovation. As Karen Dawson, a former executive vice president at the global
interactive pioneer Digitas, states, “As a creative person, if you are really doing
what you do best, a corporation is not the right environment.”256 Even a corporation (like the one she left) that is itself shaping the industry.

253

Dawson.

254

Sklaver.

255

Ibid.

256

Dawson.

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According to Sklaver, clients are thrilled by having senior-level people dedicated
fulltime to problem solving for them rather than dealing with internal politics. “[We
are] getting some of the biggest welcomes from the big businesses we once
served.”
He concludes, “Innovation can be the best revenge.”257
4.3.2.2

The newly unemployed

“There are 50,000 people out of work in advertising, people who are talented,
hirable and don’t have jobs. The supply and demand is totally out of whack. Why
not harness all that power and keep the overhead part away?”258
Hank Leber
Founder, Agency Nil
“Ad industry cuts 18,700 jobs in December.”259 For over a year, the headlines
have blared the news that agency jobs are evaporating. Marketers of every stripe
and every level of seniority are finding themselves on the street scrambling for
work alongside seasoned freelancers.
Some may argue that the newly unemployed represent the bottom of the barrel—
not the engine of future greatness—but even the most cursory review of portfolios
shows that is not true.
As such, today they represent a fertile source of personnel for fluid networks.
When the economy recovers, some will immediately re-seek agency work. After
all, virtual employment isn’t for everyone. Despite recent experience, some crave
the theoretical security of a 9 to 5. Some like the camaraderie of an office environment. Some need the structure of an office setting just to stay focused (and
maybe even to force them out of bed in the morning). But the creative tempera-

257

Sklaver.

258

Leber, Hank. CEO/Janitor, Agency Nil. Telephone interview July 9, 2009.

259

Johnson, Bradley. Ad industry cut another 18,700 jobs in December. Advertising Age, 80 (5): 1, February
09, 2009. ISSN: 0001-8899.

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ment loves freedom—and many who have entered the “gig economy” unwillingly
will embrace it long-term.
4.3.2.3

Gen Y and Beyond

“There is a shift in employment from lifetime jobs to lifetime projects. The
generation coming up, they don’t want to be fully employed.”260
Michael Conrad
Former Vice Chairman and Chief Creative Officer, Leo Burnett Worldwide
President of the Berlin School of Creative Leadership
“I was 8 years full time with a major media outlet and have been 15 years freelance...No politics, no dreadful meetings, no blanket control over my week. I give
myself yearly raises which no one has ever balked at …you can give it a negative
spin, but the truth is: autonomy over your life—priceless.”261
Comment on Tina Brown’s “The Gig Economy”
In a 2009 article titled “Portfolio Working,” The Economist states, “There has
been a demand-pull as well as a supply-push operating in the market for portfolio
workers. Many young people now prefer to work in this way. They see it as freeing them from the drudgery of the job-for-life and full-time employment contract
that was frequently their parent’s main ambition.”262

Spend a few minutes talking to Drew Jones and you understand how deep the
generational shift is. With 60 million kids entering the workforce, Gen Y is about
to take over from the 78 million baby boomers reaching retirement age over the
next 10 years. And those Gen Yers are voting with their feet—refusing to work in
“draconian workspace environments with draconian policies.”263

260

Conrad.

261

Brown, Tina. The Gig Economy. The Daily Beast. Posted April 22, 2009; downloaded July 1, 2009.
http://www.thedailybeast.com/blogs-and-stories/2009-01-12/the-gig-economy

262

Portfolio working: a vision of the way people will work in the future. Economist.com. Published November 2,
2009; downloaded November 2, 2009.
http://www.economist.com/daily/news/displaystory.cfm?story_id=14301346

263

Jones, Drew. Co-founder Austin Coworking; co-founder Shift 101 (previously AquiferDesign). Telephone
interview November 10, 2009.

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“We are telling our clients: You need to pay attention, because this is saying
something to you. The best and brightest no longer want to work for you; how are
you going to attract them to come back?”264

Jones spends a lot of time on this issue; he helps businesses tap into “the creative problem-solving power of independent entrepreneurial teams.” He is also a
designer and proponent of co-working spaces, office collaboratives where independent contractors go to work.
“On a good day a co-working space is immensely more productive than working
alone. The energy of people jamming really feeds on each other. When you see
everyone else nailing down projects and doing them, you realize that you need to
follow up that lead.”
“People are constantly collaborating with each other. It is not uncommon for me
to get an email asking for something that is way out of my competency, say,
building a website. I will say to someone else, ‘Give these people a call, they
need this done.’ Maybe my friend will only do the programming, then find someone else to do the design. They might deliver as individuals, or create an LLC for
the project.”
“The goal is to stay independent—to keep enough food on the table to not have
to go to work for one of these companies.”265
There is one additional critical factor. Gen Y has grown up on electronic devices.
They text each other across the dinner table. They play World of Warcraft with
millions of peers they never met in person. They already thrive in a virtual world.
And they may never know anything else. That they are today’s drivers of creativity—as Sir John Hegarty notes, “Creativity has a ten-year life span”266—may be
most predictive of all.

264

Ibid.

265

Ibid.

266

Hegarty Sir John, Executive MBA Lunchtime Lecture Program, Berlin School of Creative Leadership, London, September 17, 2009.

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4.3.3

Trevania Henderson

Emerging models

“You need to keep a core set of capabilities in-house—the skills needed to keep
the lights on and create the environment.”267
Shaun Abrahamson
Founder, Colaboratorie Mutopo
Within the framework of a core team supplemented by virtual resources there is a
wide range of possibility. Which resources are internal? Who curates the talent?
How virtual is virtual? Not surprisingly, at the incipient stages of this phenomena,
the answers are many. Here, I present six models, some only theoretical, some in
active practice. Comparing them enables us to consider their relative advantages,
and whether there is a difference in the type of work and client for which each is
suited.

4.3.3.1 Club Hegarty
“If I were starting an agency today, it would be like a club. We’d have a core
group of 20 and then 100-200 freelancers flowing in and out.”268
Sir John Hegarty
Chairman and Worldwide Creative Director, Bartle Bogle Hegarty
More than a decade ago, Sir John Hegarty, Chairman and Worldwide Creative
Director, Bartle Bogle Hegarty, wrote that “with the rise in digital technology, the
concept of where you work and how is being questioned…alongside this we see
people questioning the value of their employment.” He notes that the adage “I
don’t live to work, I work to live” is not only fundamentally true, it is particularly
true for those in creative organizations. And so, the organization must shift to
accommodate. “If creativity is at the heart of our offering, then being creative
about how we deliver it is essential.”269
His solution: The office as club.

267

Abrahamson.

268

Hegarty Sir John, Executive MBA Master Class at BBH, Berlin School of Creative Leadership, London, May
2009, as quoted on the Berlin School of Creative Leadership website. Accessed March 21, 2010.
http://www.berlin-school.com/ideas/weekly-wisdom.

269

Hegarty, Sir John, The Future of Work, November 1998.

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A core team of full-time, salaried people would run the club. A second group of
“members” would be paid a retainer, then additional per-project fees. Associate
members—carefully vetted, of course—would have full access to the facilities,
but only be paid for actual project work.270
Key to Hegarty’s vision is the place itself. With subsidized food and drink, organized events and outings, private meeting rooms and doubtless a sauna, it is a
place people want to be—one can almost smell the leather.
That alluring atmosphere is important to Hegarty, because he needs the people
to come into work; he is firmly against working virtually. “For the work to be good,
everyone needs to be under the same roof. Not just the creatives; everyone.”271
He believes eye-to-eye communication is crucial.
Hegarty’s vision is, in many ways, the ultimate fluid—though not virtual—network.
People with clearly identified talent are on call to form project-specific teams.
They are largely paid only for income-producing work. And because they have
glorious surroundings in which to do it, there is never a danger of not being colocated.
It is interesting to note that a group in Australia appears to have put a somewhat
scaled-down version of this model into practice. Founded in 2005, FutureAgency
describes themselves as “a network model, comprising a core team that works
with independent professionals and industry partners spanning Sydney and beyond. This enables our clients to tap into our vast pool of shared resources, people and expertise.” They have a project space in which their teams work (it is also
equipped for photography and film shoots) and they have sister companies in
Shanghai and Singapore.272 Asked why they chose this model, creative director
Lucky Huynh replies, “Mostly it has to do with the nature of how I lead [and] my
personal belief…that creative work requires stimulation from people outside your
team and your discipline…The end result is better value for money.”273

270

Ibid.

271

Hegarty, London, September 17, 2009.

272

FutureAgency website. Accessed February 8, 2010. http://futureagency.com.au

273

Huynh, Lucky. Creative Director, FutureAgency. Email interview February 8, 2010.

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Agency 2.0

“A thin agency consulting into existing structures allows more efficient use of
scarce resources.”274
Giles Rhys Jones
Global Digital Strategy Director, Unilever at Ogilvy & Mather
In August, 2009, Giles Rhys Jones published a manifesto for a new ad agency.
His thesis: Web 2.0 has produced Consumer 2.0—a consumer that is used to
control and willing to challenge, able to create and embedded in community. In
response, Rhys Jones believes, Marketing 2.0 needs to shift focus from product
to experience, from promotion to evangelism, from a single place to everywhere.
And a new type of agency, Agency 2.0, will be needed to produce that marketing.275
Rhys Jones finds the key elements of this new agency to be focus and fluidity.
Creative and strategic control remain internal, but ideas are generated via uberproducers in the ecosphere—a form of crowdsourcing. Production is largely
farmed out to third party specialists. A “resource layer” of experts provides insights as needed. One key to the structure: it is “thin.”276
For example, when building a microsite for an existing client, digital specialists in
strategy and creative direction join forces with the existing account team, then
hire a third party creative and production unit, essentially creating a projectspecific virtual team. Lean, nimble, cost-effective—and yet still within the comforting bricks and mortar agency framework, this is a solution clients across the
board could love.
4.3.3.3

Host Universal Ltd.

“We give people the chance to create great ideas very quickly with other people.”277
Steven Hess
Co-founder, Host Universal

274

Jones, Giles Rhys.

275

Ibid.

276

Ibid.

277

Hammonds, Keith H. This Virtual Agency Has Big Ideas. FastCompany.com Posted December 19, 2007;
downloaded October 14, 2009. http://www.fastcompany.com/magazine/29/host.html

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In 2005, Robin Smith had left his post as senior art director for Leo Burnett, London. As he contemplated his future, here’s what he saw:

The problem: Agencies are overstaffed and unwieldy, slow and expensive. They survive by maintaining client relationships, rather than by nurturing innovation. Too many ideas are lost amid too much paper shuffling.

The idea: Build a flexible organization that contracts work out to small, ad
hoc teams that offer the best available talent for any given project.

The result: A network of 35 creative professionals who field projects for
clients like Kellogg, the Body Shop and British Telecom.278

At Host Universal the crowd is curated, enhancing client security, but their environment is virtual, streamlining bureaucracy, minimizing overhead and enhancing
team satisfaction. Today, multiple iterations of this model thrive around the world.
4.3.3.4

Mavens & Moguls

“I feel like my role is to connect the dots…I’m a conductor of a world class orchestra.”279
Paige Arnof-Fenn
Chief Executive, marketing manager, team organizer, Mavens & Moguls
By 2001, Paige Arnof-Fenn had been Chief Marketing Officer at three start-ups.
As she exited the third, ZipCar, people started asking her to take on consulting
projects, She realized that there was a lot of available work, and that a consulting
business would be much richer if she collaborated with other professionals. So
Arnof-Fenn set out to create a business that would allow her to “work on cool
projects with smart people...I called all my contacts—former bosses, mentors,
colleagues. Before I knew it I had all these projects and all these people who
were available to do them.” And Mavens & Moguls was born.
Organized as an LLC, Mavens & Moguls has a straightforward structure—no office, simple agreements with clients and consultants. Arnof-Fenn finds the clients,
builds the teams and handles all administrative and quality-control activities; team

278

Ibid.

279

Arnof-Fenn, Paige. Founder, Mavens & Moguls. Interview July 10, 2009, Somerville, Massachusetts.

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leaders run the actual projects.
At its founding, the concept was fresh enough that Harvard Business School
made the company the subject of two case studies.
Clients appreciate being able to draw on consultants who have executive-level
experience with such industry giants as Coca-Cola, Microsoft, Viacom, and Procter & Gamble. They also appreciate the range of expertise the group offers. As
Brad Gerstner, one of the company’s first and most steadfast clients, says, “You
don’t get ‘the McKinsey’ view on things—you get a number of strong, independent views on your marketing challenges. As a general business idea, it’s great to
be able to tap into this network without having to hire the people.”280
Arnof-Fenn agrees, “I form teams based on exactly what the clients need. Sometimes we handle their PR, sometimes we act as brand police, sometimes we are
back-filling for someone on maternity leave.”281
“Often we are their entire Marketing Department. Many of our clients are earlystage, emerging market companies, $2M to $200M. They don’t really need a
$400,000 marketing director—and they couldn’t afford one, But they can keep us
on retainer for $10-25,000/month and we can [handle their needs].”282
Arnof-Fenn keeps about four dozen people in her network, deploying them as the
need arises. “If it is a multi-phase project it may be a different team for each
phase. People are all right with that; they want to be in a place where they feel
their skills are needed and well used.”283
From the contractor perspective, the group supplies the requisite structure of a
‘real job’ without the issues. “As a one-man shop, you realize quickly that if you’re
not working, your company’s not working. I needed a force multiplier,” explains
Richard Cleveland. “I liked the Mavens & Moguls opportunity because I was able
to do what I’m good at and not worry about the organization part. Paige had
280

Hart, Myra, M. et al. Mavens & Moguls: Because Marketing Matters. Harvard Business School case 9-805005. Rev. April 4,2006. Pages 1-11.

281

Arnof-Fenn.

282

Ibid.

283

Ibid.

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rates, contracts, a name, a brand, a website, all of the things you need to have a
real business. The network also expanded my skill set and my set of connections
and repertoire. I may not have known direct marketing, but someone in the network did, and that allowed me to take on projects I couldn’t otherwise handle.”284
As their tenth anniversary nears, the successes of Mavens & Moguls offer insights to others just embarking on the fluid network.
4.3.3.5

Agency Nil

“This is an incentive based, value based system.”285
Hank Leber
CEO, Janitor, Agency Nil
In May 2009, Hank Leber graduated from VCU Brandcenter. And like many of his
classmates, he found the job prospects to be bleak. So he got to work and
launched his own agency, Agency Nil.
His talent is all virtual, sourced primarily from his fellow Brandcenter graduates
and their networks of hungry creatives. Once they get a brief, they chose the
team best suited to the project. Their hook is that they do the work, and the client
decides its value—sort of an inverse form of the normal crowdsourcing model.
“Agency Nil will work without a set price, with the understanding that agencies or
clients pay what they think it’s worth upon completion—no strings attached.”286
(As one blogger noted, “A brave and innovative way of thinking.”)287 For clients
that takes much of the risk out of the equation. As Leber wryly notes “The big
thing with this model is trust and being able to sniff out deadbeat clients.” 288 And

he does ask for 10% of what they think the value will be before the projects begin.

284

Hart.

285

Leber.

286

Agency Nil works for what it’s worth. Posted May 20, 2009; downloaded October 14, 2009.
http://mymediamusings.com/tag/agency-nil

287

Agency Nil will work for all it’s worth. Posted May 20, 2009; downloaded October 14, 2009.
http://www.psfk.com/2009/05/agency-nil-will-work-for-all-its-worth.html

288

Leber.

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Just as the bulk of his talent is fresh out of school, the bulk of Leber’s clients are
not blue chip. “A lot of small businesses are using us,” he says.
“Small businesses often don’t work with agencies because it’s not something that
they can afford or marketing is not even on their radar. But they have passion—
they have sold off their car and maxed out their credit card because they believe
in their business.” That makes them exciting to work for.
“The best part so far is that the clients who are interested in this model like the
idea because it is courageous and it’s different, not because it is a cheap deal,
which means when you put a team together for them they are excited. They understand what it is like to be a small business.”
Looking ahead, Leber says, “By hiring project managers under the same model
this thing could scale huge. We could have 100 to 1000 clients, as long as everyone understands that the harder and better they work, they can make great
things happen.”289 He is also using crowdsourcing as a client referral system, and
mentioned adding a public client-rating system, which would certainly encourage
anyone hoping to be a repeat customer to pay fairly the first time.
When Leber launched, he received tremendous attention in the blogosphere. As
one pundit mused, “While this might sound insanely risky, it’s not like the guy was
passing up some wonderfully secure opportunity…It is a simple, put your money
where your mouth is, situation, and it is hard to see how he can lose. If he actually succeeds in any significant way, the model could become a real threat to
established agencies.”290
4.3.3.6

Victors & Spoils

“There are ways to control the self aggregating group; you use the people who
create value.”291
John Winsor
CEO, Victors & Spoils

289

Ibid.

290

Agency Nil works for what it’s worth. Posted May 20, 2009; downloaded October 14, 2009.

291

Winsor.

http://mymediamusings.com/tag/agency-nil.

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Discussing the concept of fluid networks, Michael Conrad, former Vice Chairman
and Chief Creative Officer, Leo Burnett Worldwide, comments that “[The network]
needs to be really cutting-edge, but also has to develop a big picture point of
view. Then you begin to collaborate.”292
Victors & Spoils has exactly this pedigree. Founded by three people with impeccable marketplace credentials293 (and presumably equally impressive contacts), it
harnesses the power of crowdsourcing while retaining both the client contact and
strategic and creative oversight of a more traditional agency. Their website explains their point-of-view:
“The way we see it, companies need an alternative to both current ad agencies
as well as current crowdsourcing platforms. One that offers the strategic direction, engagement and relationship management that agencies deliver today, but
one that also delivers the engagement, cultural relevance, results and return on
investment that crowdsourcing (if managed and directed well) can deliver.”294
The agency considers every function to be creative (“You can’t succeed in an
agency anymore if you’re not creative.”295) and invites anyone to apply to join
their creative department. Just six months after launch, 750 people from around
the world have already “opted in.” The agency then uses an iterative approach to
harness that talent to solve specific client needs.
John Winsor, Victors & Spoils CEO, describes a recent engagement. “We put a
proposal out to all 250 people in the community who had expressed interest or
had an expertise in the field. In 20 minutes 80 people had gotten back to us; we
chose 20 and paid them for their ideas. From those ideas, we selected five semifinalists and spent a lot of time curating them. We took the results to our client,
discussed them and together we awarded a winner.”

292

Conrad.

293

Evan Fry, former Vice President/Creative Director Crispin Porter + Bogusky; John Winsor, respected author
and former Vice President/Executive Director, Strategy and Product Innovation at Crispin, Porter + Bogusky;
Claudia Batten, a founder of Massive, the first company to harness video gaming as a full-blown advertising
network.

294

Victors & Spoils website. Accessed March 6, 2010. http://victorsandspoils.com

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He continues, “Our vision is not to have a community of 30,000, but a community
of 5,000 strategy directors and creative directors. We then help brands curate all
this creativity. How? I think it is the same thing that is going on in social networks:
People become social editors of another’s output; they build their own brand
around what value they bring to that editing or curating.”296
Clients have been very receptive. In just six months, “we have already done 14
projects, all for global Fortune 200 clients. Every day we get calls saying, ‘I can’t
stand the old way of working.’ The clients are all psyched.” Winsor notes, however, that competitive agencies are significantly less enthused, “We definitely
have a lot of arrows in our back from traditional agencies. The agencies don’t
want to see their world come to the end—but advertising as we know it is over.
We are pushing that change forward.”297
4.3.4

Analysis

“The client doesn’t care if the person works for you; the client cares if the person
works for them.”298
Matthew Clark
Global Marketing Director, Strategy Practice, The Boston Consulting Group
“When Andy Law created St. Luke’s from the ashes of Chiat/Day London he began by phoning all his clients. He found that none cared much who owned the
company as long as the work was good.”299
Stevan Alburty
Writer, FastCompany.com
Marissa Mayer, Google’s Chief Experience Officer, regularly gives a lecture titled
“9 Principles of Innovation.” Two of her principles resonate in this context:

Ideas come from everywhere.

295

Winsor.

296

Ibid.

297

Ibid.

298

Clark, Matthew. Global Marketing Director, Strategy Practice, The Boston Consulting Group. Interview
November 12, 2009.

299

Alburty, Stevan. The Ad Agency to End All Ad Agencies. FastCompany.com. Posted December 18, 2007;
downloaded October 14, 2009. http://www.fastcompany.com/magazine/06/stlukes.html

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Find the talent and use it.300

These are the founding tenets of the fluid network. However, the question remains: How does the model stack up against the established metrics for success—and is one iteration more effective than another?
4.3.4.1

Relationships still matter.

“It’s all about who you know. Sometimes I think that networking is more important
than talent.”301
Hank Leber
Founder, Agency Nil
Before you can do the work, you have to get the job. And as discussed in Section
3.4.1.1, work assignments are often contingent on personal and professional relationships. In theory, this would seem to be no different for a fluid network than
for an established agency; in practice, the agency may have an advantage simply
by virtue of having a larger executive team, and thus more contacts and more
people to maintain them. Also, some people choose to work in the fluid model as
an escape from schmoozing, an opportunity to focus on the work rather than the
relationship. (“I don’t really want to socialize with the client; I want to do the work.
If they are looking for that socializing I am not the right person.”302 Much as I
sympathize, I am afraid that is a pipe dream. Clients use people they know and
names they trust. Moreover, clients are people; they like to be stroked. But if the
spearheads of fluid networks recognize those facts and act on them, the issue
becomes relatively moot. As Arnof-Fenn says, “I network because I enjoy it, I’m
very gregarious. I grew up in New Orleans which is a very social, active place…A
colleague once told me that he believes that my coming from New Orleans has
contributed more to my success than even my MBA from HBS (Harvard Business
School).”303

300

Salter, Chuck. Marissa Mayer’s 9 Principles of innovation. Fast Company.com. Posted February 19, 2008;
downloaded February 8, 2010. http://www.fastcompany.com/article/marissa-mayer039s-9-principlesinnovation

301

Leber.

302

Suda.

303

Hart, Myra, M. et al. Mavens & Moguls: Creating a New Business Model. Harvard Business School case 9805-050. Rev. November 29, 2004. Pages 1-8.

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A related issue—and one potentially far more challenging for the fluid network—is
securing the client’s trust. Being responsible for the advertising of a $160 billion
company, Amie Doran states, “A lot of my credibility rests on the work the agency
delivers.”304 Doran and her peers aren’t going to risk their reputations (or their
jobs) on a group of outliers, no matter how much they like the person or the proposal. They need to be able to defend the choice to their senior management and
board of directors.
For some clients, then, the very fact of being virtual is a deal killer. As Maureen
Suda, who heads her own fluid network, notes, “Sometimes people like the comfort of a brand; they want to buy Chanel or BMW. If so, we’re not for them.”305
So how do the fluid networks attract clients? Some begin by stealing the clients
they were servicing at their agencies (see the quote above about Andy Law).
Others launch with a big name at their head—a name that is in its own right a
brand. Victors & Spoils is the brainchild of two highly decorated Crispin Porter +
Bogusky alumni; should Sir John Hegarty found his club, he would have no trouble attracting clients. For anyone starting or running a fluid network, contacts matter.
4.3.4.2 You don’t need walls; you need infrastructure.
“It’s more disruptive for someone not to have a website, than not to have an office.”306
Ally Polly
Head of Strategy and Brand Relationships, Filmaka Entertainment Studios
No matter what form the agency takes, clients pay to have work well-executed
and delivered on time. That requires clear, intelligently designed processes and a
means of incenting people to follow them.
The processes can be as simple or complex as the task warrants, but should certainly include a brief, a schedule, internal brainstorming meetings, reviews, ample

304

Doran.

305

Suda.

306

Polly, Ally. Head of Strategy and Brand Partnerships, Filmaka Entertainment Studios. Telephone interview
February 3, 2010.

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time for production and proofing—in short, all the checkpoints a traditional
agency would offer.
Incentives can be equally straightforward. In a traditional work setting, such incentives are clear: You do the work or you get the boot. Clients, particularly, express concern over how such incentives work in a virtual setting, when talent often has other clients competing for their time and mindshare. They fail to consider
that talent often faces those same dilemmas in agencies, and that fluid groups
have the same means of enforcement: people who don’t perform well or play
nicely get invited to leave the group. In addition, people who rely directly on their
customers for their paycheck often put more effort into customer service; that is
no longer just the bailiwick of the account executive.
4.3.4.3

Wait. You do need walls.

In discussing his club concept, Sir John Hegarty was very clear that members of
the team need to be physically together when doing the work.307 Not everyone
finds that necessary (and I believe it will become increasingly moot to people in
Gen Y and beyond). However, almost everyone thinks a business needs some
sort of physical office space to give clients the comfort that it is a “real business.”
Lisa Schiavello of boutique digital firm Red Door, recounts a revealing exchange
with one of her clients. “We had been working with this client for awhile, and had
always met at their offices. Recently they asked to meet at our offices instead,
saying, ‘We love you, we love the people we’ve met, we just want to make sure
that you are legit, that you are not working out of someone’s kitchen.’ They love
the work, the thinking, the strategy—why would they care if it came out of someone’s kitchen? But they do.”308 Even Victors & Spoils has an office housing six
people. John Winsor admits, “We want the touch and feel and smell of an
agency; it’s for the clients.”309

307

Hegarty, London, September 17, 2009.

308

Schiavello.

309

Winsor.

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But does the team have to work there?

In a world where AIG and Goldman Sachs negotiate a $3 billion deal on a conference call,310 the need to lock teams together in a room until they solve the
problem seems to have passed.
Certainly conducting all business aspects in the clouds is no problem. Describing
her company’s processes, Ally Polly says, “The client pays for access to our
community which comes from 150 countries around the world. It is all online.
Everything can happen conceptually without anyone ever meeting. It all happens
because of the digital age. We have a digital brief; filmmakers log in to read it;
they deliver the work digitally; all rights and legal issues are handled online; we
pay on line. It is all electronic.”311
The question is whether that degree of virtual communication works at the level
of teams, where the inter-personal dynamic may be a crucial factor in the success of the work. Acclaimed creative director Lars Hemming Jorgensen talks
about handling decentralized global accounts. “We might have a team that is in
three different places; it doesn’t work brilliantly.”
He continues, “I struggle with my job when I don’t spend enough face time with
my people. There are so many things I can see in their eyes about whether they
are on board, whether they get it or not. I want to spark people’s creativity, energize them. I have to do that face to face; I can’t pep talk a crowd of 20 on a conference call.”312
Keith Reinhard shares a similar perspective. “I recently spoke with a very bright
young account man from Crispin Porter who quit and joined Weiden Kennedy in
New York because (among other things) he says that coordinating a three office
team is not as effective and gratifying as having your account team, creative and
planning, all in one physical place so that social activities, inside and outside the
workplace, and other ‘family’ aspects can be integrated into the day to day environment. Interesting that this is a young man totally savvy about all the new me310

Morgenson, Gretchen and Louise Story, Testy Conflict with Goldman Helped Push AIG to Edge, The New
York Times, Published February 6, 2010. http://www.nytimes.com/2010/02/07/business/07goldman.html Accessed February 19, 2010.

311

Polly.

312

Jorgensen.

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dia who prefers human contact and camaraderie and believes it makes for a better product and better client relationships.”313
Working virtually also exacerbates the issue of keeping people on task: Even
crowdsourcing guru Shaun Abrahamson admits that “if people are remote, it is
harder to create urgency; people are more likely to respond when they can see
everyone else working on something.”314
Despite the virtual nature of her company, Ally Polly agrees, “With creative
teams, at some point people need to be bouncing ideas off the walls.”315 She
thinks technology may prove a barrier for that exercise, rather than an enhancement.
The obvious solution here is to have a physical space you ask the team to be in
while working on the project—Sir John Hegarty’s model, for instance. However,
that either limits your talent pool to people within your geographic confine or else
greatly escalates the cost to the client as they pay airfare, room and board for the
duration of the project. Plus, as Peter Pappas of fluid network 8 Beacon Partners
observes, “Sometimes it is just hard to get people in a room together; it’s easier
to work virtually.”316
Karen Dawson, who left a big multinational power agency to organize her own
fluid network, adds, “With the virtual model, it is easier to see someone who isn’t
working out.”317 A lack of online communication, postings and participation is instantly visible, whereas the person doodling on their notebook may be less immediately obvious.
Of course, there is still the issue of chemistry. Dawson continues, “If the spark
between two people matters to the project, then you need to meet people ahead
of time. That is true whether it is an agency or a virtual team.”

313

Reinhard.

314

Abrahamson.

315

Polly.

316

Pappas.

317

Dawson.

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Joleen McFadden of RAZR Marketing furthers that thought, “We do a lot of work
electronically and through phone conference. We have had people working from
a houseboat on a tour, people working all over the country. Remote works well.
But it works best if you have worked together at some point before.”318
Others concur with that thought: once the chemistry is established there is less
need to be in the room together; you speak the same shorthand and have less
room for misinterpretation. New technologies also support on-line collaboration,
enabling remotely located teams to see the same images and documents in real
time.
Bob Greenberg of digital powerhouse R/GA believes that these new technologies
will make working virtually the norm; “they will change the way we work as much
as the Blackberry.”319 Or the iPhone.
I firmly believe that the virtual trajectory will only increase. As described in Section 4.3.2.3, today’s teens do not have the same need for face-to-face communications as people of previous generations. When they join the workforce en
masse, virtual communication will become even more normative.
4.3.4.5

Just who is the team?

“We would get nervous if we were reaching out to all new people that we don’t
know, so we look for recommendations from people we trust.”320
Elaine Leonetti
Director, Strategic Development at Six Degrees
Fluid networks have a second decision-point not faced by any other model—from
traditional agency to completely crowdsourced: How do they locate talent? Like
the question of working locale, the question of sourcing talent is inherent to their
neither-fish-nor-fowl status, and the answer relates to just how virtual is virtual.
Fluid networks typically form teams one of two ways: They either crowdsource
their talent, or they have a curated crowd, a group of “go to” people whose work

318

McFadden.

319

Greenberg.

320

Leonetti.

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and working style are known. And while crowdsourcing is gaining momentum,
most of the folks I spoke with who are orchestrating fluid networks prefer the
“walled” approach, working with a known group of consultants, then adding specialized expertise by asking people in the inner circle for recommendations of
colleagues who have the requisite knowledge base.
Vicente Garcia, whose Barcelona-based agency Kardumen Digital Sympathy has
a core team of three, uses a member-bring-a-member network to add expertise
as needed. “We try to spend some time [with prospective team members] to get a
sense of the personal chemistry. We work only with people we like personally,
therefore they like each other too.”321
4.3.4.6

Presenting your dedicated experts on any topic.

“If you accept that every problem is unique, then surely a unique blend of
new/different skills/people will produce something better than the fixed (slowly
regressing) ‘creative agency team’?”322
Justin McMurry
Thinker and Strategist, Made by Many
As addressed in Section 3.2.1.2, the options and opportunities to engage customers have expanded exponentially—and shift day by day. As such, true expertise is hard to maintain—and almost impossible to maintain in more than one
arena. If the networked agency model enables brands to access mediaappropriate specialists, the fluid network provides equal or greater targeting options.
Maureen Suda has a roster of healthcare and biotech public relations specialists
at her fingertips. She notes that even within the circumscribed world of “people
who call themselves media relations consultants” there is a wide range of skill
sets. So even though she has “several go-to people, [when building a team she]
can look not just for a great media person but for the right media person. Some
have a natural capacity to do strategy, others are just tactical; some are better at
pitching hard news events, others are better at proactive media feature arti-

321

Garcia.

322

Malbon; Justin McMurry commenting.

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cles.”323 Conversely, she observes, “If I were a firm and had a staff of ten, I would
just keep filling the teams with my staff.”
Other fluid network proponents agree. Elaine Leonetti recalls, “At [my former employer] we had to use who was available at the time—and sometimes that was
like putting a round peg in a square hole.” Her current firm often uses consultants; “That gives us a stable of people we can pull from for expertise on specific
projects.”324
And when working in the rapidly changing digital world, having access to the
people who are actively creating the new generation products can make all the
difference to your deliverable.
4.3.4.7

Keep the team and the institutional knowledge.

“When you bring new creatives you can bring new energy and freshness—but
you end up spending a lot of time educating them.”325
Matthew Allen
Vice President, Account Director
Arnold Worldwide
One consistent criticism of the fluid network assumes that the team is new each
time, so the insight and brand knowledge gleaned on one project are lost on the
next.
This is not necessarily true.
Independent producers like a steady client; there is great security in knowing that
you are important to someone’s brand and great camaraderie in being part of a
team. When things are working well, the team may stay intact for a long time.
Conversely, with an agency there is still no guarantee that the team stays in tact;
people get pulled onto other projects and/or change jobs every day.

323

Suda.

324

Leonetti.

325

Allen.

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As Leonetti says, “You can wish for full time, but even if you go to an agency,
there is no guarantee that the employee will stay on the project. Freelancers are
more likely to remain on the project because they need the work; [you are literally] their bread and butter.”326
4.3.4.8

Can there be a culture in a fluid network?

Defenders of the current agency model inevitably mention their culture as a critical component of success. It imbues the team interactions, feeds the work, establishes the definition of success. This begs the question of whether a fluid network
can have a culture—and whether it is inversely proportional to the networks’ virtualness. As Ben Malbon, Managing Partner of the BBH global innovation unit,
BBH Labs, asks, “When does the definition of an agency blur to the point of intangibility? When does JWT (or BBH, or Victors & Spoils, or IDEO for that matter)
cease to be JWT? When does JWT become Victors & Spoils? When does it simply become a set of senior and experienced curators of skills, talent and partnerships?”327
I believe that in any organization, culture is set by the leadership and disbursed
via the processes and expectations they put in place. Thus, an agency that consists solely of “a set of senior curators” will still have a definable culture. How do
they chose the team? How specific is the brief (is it just the end goal or also the
method of reaching that goal)? How deeply are individual ideas explored? Is one
discipline’s voice louder than others? Is there an aura of mutual respect? Does a
Tuesday delivery date really mean Tuesday—or is Friday acceptable? What is
the definition of success, and how are people rewarded when they succeed? Is
there a star system? Are the jokes well-intentioned or at someone’s expense?
These dynamics exist within even the most virtual community. The resulting atmosphere—collaborative or competitive, buttoned-up or free-for-all, hierarchical
or collegial—is born of processes and incentives, rewards and recognition.

326

Leonetti.

327

Malbon.

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Being nimble and fluid means perforce less bureaucracy—and

lower costs.
“I am not intimidated by big agencies; I see them as big, slow, not getting it.”328
Lars Hemming Jorgensen
Partner, Chief Creative Officer, Story Worldwide
“When I worked at Burson-Marsteller we moved at the speed of clients. Our clients were large pharma and things were SLOW. When I moved to a boutique
firm, we had smaller clients, and the pace was faster. Now my clients are in biotech and speed is a key selling point. They move at warp level compared with the
huge bureaucracy of a Fortune 500 pharma company, so they like that I don’t
have anything weighing me down. The feedback that I consistently get from clients is [that they appreciate] my flexibility and responsiveness. I am not writing
performance reviews; I’m not reporting to the powers that be how I am going to
meet my quotas; I don’t have all those administrative duties of a large firm; I am
just doing the work.”329
Maureen Suda, now proprietor of her own fluid network, speaks eloquently to the
value swiftly moving companies place on service providers who can keep pace.
By their very nature, fluid networks have less bureaucracy and hence less drag.
And, since time is money, that means the work is not only delivered sooner, but
at a lower cost.
So far, so good. Who doesn’t want something sooner for less money?
Well, based on Suda’s comment, large companies. They are slow, and the work
for them is slow. However, I would argue that it wasn’t always that way, that the
bureaucracy has grown over time [see RG/A’s description of the evolution of the
advertising industry http://www.rga.com/about/featured/our-model] and that now
there is a sense of inevitability about the unwieldy process, a sense that there is
nothing to be done.

328

Jorgensen.

329

Suda.

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Yet, many fluid networks describe how corporations turn to them whenever they
need something quickly:

The agency of record “can’t turn around a 3D video in five weeks, but we
can.”330

“[If it is a large, all-consuming project] their deadlines are my deadlines; I
am more flexible and able to respond more quickly. When we proposed
our rate, Pfizer increased it and said, ‘When we call we want you to say
“Whoo, Hoo!”’”331

“They came to us saying, ‘We need a TV commercial on the air in 6 weeks
and [the agency] just doesn’t move fast enough.’ We did.”332

“Clients want to see progress. Sometimes with big agency they don’t get
that progress.”333

While less bureaucracy means greater speed, is there a gating factor in the size
client or amount of work that is possible?
Maureen Suda says yes. “There is a certain size account I can’t take. I always
think back to launching Celebrex. My business could never withstand something
that size. The day of approval we had 15 people on the phone. That truly is an
agency project.”334 Yet after some probing, she agreed that she could easily build
the network to handle that sized project, she just doesn’t want to. Other network
doyens agreed. The larger the network, the more their effort has to go into running it and the further they get from the work. Whether that attitude will hold true
for a future generation—one that begins with a network model as opposed to
seeking it as a refuge from the large agency world—remains to be seen. I believe
it won’t, and that people raised in the fluid world will seek and seize ways of
maximizing their reach.

330

Leonetti.

331

McFadden.

332

Pappas.

333

Brett.

334

Suda.

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4.3.4.10 Conclusion
“There are opportunities to create magic for the client; you can only do that when
you build the team for the project.”335
Vicente Garcia
Planner & Creative Director, Kardumen Digital Sympathy
Fluid networks answer many of the needs of today’s clients and workforce. Properly orchestrated, they harness the opportunities afforded by the internet to ensure that every team has the best talent for the task at hand. They ensure that
people spend their time on the work, rather than the paperwork. And they can be
crafted to maintain all the key attributes of a bricks and mortar group, from strong
client service to consistent, dedicated teams to a culture that fosters teamwork
and great thinking. Moreover, as Gen Y enters the workforce—and as technology
grows even more robust—issues related to working virtually will become increasingly moot.
But can the model work for a big client? I think so.
Keith Reinhard, chairman emeritus of DDB Worldwide, is a man with 15,000 people across 96 countries in his back pocket. He asks, “How do you apply the fluid
model to ExxonMobil that needs service in 56 countries (and a different service in
many of them)? In Boston and New York how do you know who to reach out to in
Singapore and Abu Dhabi?”
His answer lies in creating a strong brand culture for the network. He goes on to
say, “The stronger the culture, the less need [there is] for structure. A brand culture that is understood has tremendous value to local entrepreneurs figuring it all
out. McDonalds has done that by empowering like-minded people in markets
worldwide; they could not sit in Oakbrook, Illinois and think of the programs that
have been having tremendous success in China—but the Chinese understand
what’s valued and provide direction.”336

335

Garcia.

336

Reinhard.

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By extension, building a network of networks, bracketed by a strong, clear network culture, will enable fluid teams to deliver consistent work at any scale and in
any venue the client requires. And it answers the local knowledge/global reach
conundrum beautifully. Of course, coordinating it will add some complexity, some
(dreaded word) bureaucracy. But a combination of technology and autonomy will
streamline many operations and because the model is more flexible, bureaucratic
infrastructure can come and go as the need arises.
For multinational corporations, the fluid network poses two other potential issues,
however. Based on decades of experience in servicing global clients, Michael
Conrad points out that “big clients may be concerned about their trade secrets.”337 We all know that nondisclosure agreements only go so far, and clients
might understandably feel that non-employees would have even less reason to
adhere to them. Still, like other virtual vs. bricks and mortar issues (a committed
team, a corporate culture, true collaboration) if the team is well-curated they
should be individuals who understand the importance of maintaining the clients’
trust—even if it is only out of self-interest. As LinkedIn graphically demonstrates,
we operate in a very small world.
A second, perhaps insurmountable concern, is that employment laws vary from
nation to nation—and so the model literally may not be possible as a global solution. I have not explored this issue, feeling it is outside the scope of this thesis,
and so cannot offer an educated opinion.
Notwithstanding these issues, I feel that the fluid network has a solid place in
today’s marketing realm, one that is growing exponentially (witness the numbers
of groups formed in just the last year), and one that will become ever more powerful as it becomes increasingly normalized.

4.4

DIY: crowdsourcing by the client

“Work is no longer a place you go but a thing you do.”338
Drew Jones
Co-founder, Shift 101

337

Conrad.

338

Jones, Drew.

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“Crowdsourcing is the act of taking a job traditionally performed by a designated
agent and outsourcing it to an undefined, generally large group of people in an
open call.”339
Jeff Howe
Wired
“It’s small potatoes.”340
Craig Markus
Executive Creative Director/EVP, McCann Erickson & Tag Ideation
“The ultimate endgame is companies crowdsourcing their work without agencies.”341
Chip Bergh
Group President, Global Personal Care, Procter & Gamble
Clients have always crowdsourced. They just call it pitches.
At ad:tech Chicago this past September (2009), a Sears marketing executive said
that, in general, he prefers the competition of ideas rather than devoting all his
business to one agency.342 And several client-side folk I interviewed admitted to
circulating RFPs occasionally just to see what is out there.
But now there is a guilt-free way to get far more ideas—at a far lower cost. Just
post your brief on the web and see what rolls in.
4.4.1 A plethora of options
When Fast Company blogger, Danielle Sacks first saw OpenAd.net, she described it as “a sort of eBay for advertising, marketing and design ideas.”343 Today, the model is seemingly ubiquitous: Crowdspring, Idea Bounty, 99Designs,

339

Jones, Giles Rhys quoting Jeff Howe.

340

Markus.

341

Bergh.

342

Ebbert, John. The Virtual Agency Model. AdExchanger.com Posted November 16, 2009; downloaded January 2, 2010. http://www.adexchanger.com/agencies/the-virtual-agency-model/

343

Sacks, Danielle. Another Ad Agency Disrupter? FastCompany.com Posted July 31, 2007; downloaded
October 14, 2009. http://www.fastcompany.com/blog/danielle-sacks/culture-vulturist/another-ad-agencydisrupter

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namethis, Chaordix, kluster, eLance, openinnovation.org, PopTent, Filmaka, Your
Encore, GeniusRocket, bootb, BountyStorms, Denok, Spudaroo, designbay, designcrowd, AdHack….in a few short years it seems the concept has spawned a
nearly infinite number of sites aimed at connecting clients with talent of all kinds.
And that doesn’t even count the crowdsource-based fluid networks described in
Section 4.3; for the purposes of this discussion crowdsourcing is limited to those
sites that simply connect clients with the crowd, adding no strategic or curatorial
eye.
The crowdsourcing idea seems tailor-made for Mom and Pop bodegas and the
like, businesses that don’t have access to or budgets for agency creative, but still
need a logo. What is striking is that marketing giants like Procter & Gamble are
harnessing crowdsourcing too. Their “Connect and Develop” innovation portal is
considered by many to be a gold standard; over half the proposals submitted
come from outside the company. “P & G has almost doubled its internal revenue
since this has been in place.”344 However, others caution that the model is “very
disrupted around intellectual property. It’s a problem.”345
Even Bartle Bogle Hegarty—which surely has some pretty good creative resources at its fingertips—posted the brief for BBH Labs’ logo on Crowdspring and
got 2,367 submissions in the course of two weeks. All for $1500.346
Some agencies are even using crowdsourcing to boost their internal brainstorming.347 Normally that brainstorming would take up the billable time of, say, 15
people. Together, they might generate ideas that just two people wouldn’t surface. The negative is that of the 15, probably 10 add nothing but their time. With
crowdsourcing you can get all those inputs at a low, low price.
Agencies aside, for client and creative, the allure is clear. “Companies can access the best creative ideas from any corner of the earth, while creatives can win

344

Jones, Drew.

345

Abrahamson.

346

BBH Labs A logo project by Bartle_Bogle_Hegarty. Posted April 22, 2009; downloaded October 14, 2009.
http://www.crowdspring/projects/graphic_design/logo/bbh_labs

347

Jones, Giles Rhys.

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business from brands that otherwise wouldn’t let them past parking lot security.”348
Of course, not everyone thinks the crowdsourcing movement is great. Roars
have gone up around the creative community from people who feel like they now
live in a constant pitch state. Commenting on Tina Brown’s essay, “The Gig
Economy,” one writer posted: “The most frightening part of your column—
because it is so true—is, ‘The managers of all these disintegrating companies
tend to be mesmerized by the notion that…everyone is slave labor.’ Too many
business models are based on getting someone to do something for free or negligible compensation.”349
4.4.2

Analysis

“The wisdom of the crowd is not always wisdom.”350
Faris Yakob
Chief Technology Strategist, McCann Erickson, New York
“With tools to manage workflow and deliverables it’s now a marketplace for great
creative. People connect with the right creators at the right time.”351
AdHack Website
“Free is not in my vocabulary.”352
Elaine Leonetti
Director, Strategic Development at Six Degrees
Crowdsourcing clearly offers advantages and appeal. But how does it stack up
against the other options in meeting client needs?
4.4.2.1

Relationships—client or team—are more or less forgotten.

Some forms of crowdsourcing rely on the crowd to form their own teams, then
share their results. But largely, the very nature of crowdsourcing means working

348

Sacks, Danielle. Another Ad Agency Disrupter?

349

Brown,

350

Malbon, Faris Yakob, Chief Technology Dude, McCann, New York, commenting.

351

AdHack website. Accessed January 2, 2010. http://adhack.com/all-about-adhack

352

Leonetti.

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solo, with the anonymity of the web as a protective barrier between parties. As
one industry veteran notes wryly, “Of course, it’s a long trust-building process
with both the clients and the network.”353
4.4.2.2

There is no trust, only results.

No one looks to the crowd for a trusted resource. They look for numbers, trusting
that among them the prized solution will shine forth.
4.4.2.3

Global reach? Local knowledge? You bet.

The crowd is, after all, everywhere. Whether you trust their information is a whole
other story.
4.4.2.4

Innovative, media-agnostic solutions live here.

For new media—and new ideas—your experts are all online. Should you need a
traditional ad or an integrated campaign your experts may be here too. But the
client will need to decide the strategy, for sure.
4.4.2.5

It’s all about cheap, fast, nimble.

At all times it is useful to remember that there is an 18-year-old in a garage
somewhere who can knock your socks off. He will do it by tomorrow morning because he doesn’t mind pulling an all-nighter, and he is happy to work for peanuts
because he lives with his parents. (Or in a third-world country. Or both.) And with
crowdsourcing, your client can find him and a few million of his friends instantly.
There is no denying that crowdsourcing leverages the power of the internet to
deliver work with alacrity, at a low cost and with no irritating bureaucracy.
4.4.2.6 It’s the bane of the industry.
Asked whether the advent of crowdsourcing risks commoditizing agency work,
Alex Bogusky, of Crispin Porter + Bogusky, replied, “Sites like Crowdspring are
probably the greatest risk…[still] people had the same fears with desktop publishing, but they turned out to be unfounded. In the end, the categories that become

353

Jones, Drew.

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commodities do so because they in fact are a commodity. So we shall see: Is
creativity a commodity?”354
Well, apparently, yes. At least, if quality isn’t a huge sticking point. “[With crowdsourcing, creative] has come down to a price war. When someone can do a logo
for $250, it has become a commodity.”355
Recently, a blogger wrote, “While there is clearly a level of quality that we, in the
business, all aspire to, we are in the midst of the ‘good enough revolution’ for
sure. Content is valued as much for speed, accessibility, and portability as for
polish and production.”356
4.4.2.7

Conclusion

While the metrics of crowdsourcing are indisputable—statistically speaking,
10,000 minds are 1000 times more likely to come up with a good solution than 10
minds are—the model lacks the cohesion and strategic oversight to supply more
than one-off solutions.
While I believe that crowdsourcing will remain a force as long as there are people
who like to solve problems and have time on their hands, I cannot see this model
subsuming the agencies large or small, stolid or fluid. Once the first blush rubs
off, I imagine its real niche will be in supplying specific materials clients know they
need and in expanding graphic design and analogous services to people for
whom they had previously been out of reach—rather like Kinko’s graphic design
services supplies business cards and slim jims to companies that previous used
Xeroxed fliers. As such, crowdsourcing will, however, encroach on the livelihood
of small-time freelancers, who now have to compete against their ilk worldwide.

4.5

Conclusion to Chapter 4

In Chapter 3 we examined a series of data points that interviews and articles had
identified as valuable contributors or influencers in agency success. In Chapter 4

354

Liebling, Rick. Agency Nil, Crispin Porter + Bogusky & BBH Labs on agency models. Eyecube. Published
June 2; downloaded October 14, 2009., 2009. http://www.rickliebling.com/2009/06/02/agency-nil-crispinporter-bogusky-bbh-labs-on-agency-models/

355

Leonetti.

356

Malbon, Edward Boches commenting.

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we analyzed four broad agency models against those data points to ascertain
where the strengths and weaknesses of each lie—for instance, traditional agencies excel in nurturing client relationships, whereas crowdsourcing eliminates any
real human connection, relegating that client-agency relationship to a purely
commercial/financial transaction. Conversely, traditional agencies, no matter how
large, primarily utilize the talent they have on staff; via crowdsourcing clients can
access talent available throughout the world, choose the best, and pay a fraction
of the agency cost.
In Chapter 5, we will chart the analysis presented in Chapter 4, and consider the
relative importance of each metric in meeting the needs of a range of clients and
projects. Over time, as yet-unknown forces shift marketing needs, economic drivers and work habits, today’s analysis will inevitably become moot. We will address some of these potential shifts in Chapter 5; I also hope that agencies and
researchers can use this framework to reassess the efficacy of potential models
in the future.

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Conclusion: Which model works best?

“If you determine how you define success, then you can figure out the key [attributes of a] model to meet those needs. To get Apple messaging you need that
client/agency relationship. To sell Burger King you need field teams and franchisees.”357
Craig Markus
Executive Creative Director/EVP, McCann Erickson & Tag Ideation
“It’s about effectiveness. Clients want outcomes, not outputs.”358
Ian Millner
CEO and Founder, Iris
Before we can determine the best path to success, we have to define success.
For many agencies, prestigious awards have long been the sine qua non. Awards
validate their efforts and bestow an aura of stardom. They dazzle some clients,
too. But for most clients, success means moving the needle on their brand—
increasing awareness, sales, or Wall Street valuation. Consequently, those are
the metrics on which they judge their agency.
In Chapter 3 we identified agency components that are valuable to clients and
those that aren’t. In Chapter 4 we considered four broad agency models, and
measured them against their ability to deliver on each of the valued components.
In Chapter 5 we will explore what that means today and in the future.

5.1

A quantitative rating of qualitative forces

Since a quantitative analysis of results is beyond the scope of this thesis, let us
compare the four main models along the indices set forth in Chapter 3, assigning
weights in order to arrive at a sort of quantitative rating of qualitative forces. As
organizational design consultant Reed Deshler says, “I would define winning as
figuring how you are going to cause people [clients] to chose you over others.” 359

357

Markus, Craig. Executive Creative Director/Executive Vice President at McCann Erickson & Tag Ideation.
Interview November 5, 2009, New York City, New York.

358

Agency Future, Agency Evolution Report.

359

Deshler, Reed. Principal, AlignOrg Solutions. Telephone interview November 24, 2009.

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These indices are the characteristics, tools and deliverables agencies use to attract and retain clients.

Tab. 4. A quantitative rating of qualitative forces
Using a straightforward +2 to -2 rating system (with points given according to
whether something is a strength or weakness), we find that networks of specialty
agencies and fluid networks of lone rangers rate highest. Some explication:

Traditional agencies excel in nurturing client relationships, whereas
crowdsourcing eliminates any real human connection, relegating that client-agency relationship to a purely commercial/financial transaction.

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Clients inherently trust established agencies, whereas the leads of virtual
models have to prove themselves and crowdsourcing only delivers faith
through volume.

Traditional agencies primarily utilize the talent they have on staff; via
crowdsourcing, clients can access talent available throughout the world,
choose the best, and pay a fraction of the agency cost.

Traditional agencies have too much bureaucracy; crowdsourcing takes too
much management on the part of the client.

The two networked systems have the potential to retain many strengths of
a traditional agency, including solid client and team relationships, culture,
collaboration and consistency. Of course, in fluid networks, particularly,
the burden for instituting and implementing these attributes lies firmly on
the person or people spearheading the group.

All four models can deliver on the local knowledge/global reach paradigm.

Fluid networks, crowdsourcing, and, to an extent, networks of specialty
agencies outpace traditional models in three key areas: they are truly media agnostic; offer up-to-the-minute specialized expertise; and are (sometimes dramatically) more cost-effective.

Thus, in a purely quantitative analysis, networks of specialty agencies and fluid
networks prove collectively more effective than traditional agencies or crowdsourcing.

5.2

The move towards networked solutions

John Winsor, the force behind fluid network Victors & Spoils, believes the digital
age precipitated a seismic shift from scarcity to abundance. “The agencies represent the world of scarcity: scarcity of knowledge, scarcity of expertise, scarcity of
technical equipment. When these were scarce resources, clients who wanted a
30-second spot had to pay. [Editing film—or later working on an Avid—took real
expertise and expensive equipment.] Now, we live in an age of abundance. Everyone has the same tools, and those tools are getting cheaper. Anyone can edit
[a 30-second spot] on their Mac.”360

360

Winsor, John. CEO Victors & Spoils. Telephone interview March 1, 2010.

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“In the future, digitally connected networks that can be curated will get things
done [and provide tremendous] cost savings. Agencies are living on borrowed
time, because they are still charging high prices, and clients aren’t quite clued in;
it is just a matter of time before the system just collapses under its own hubris
and weight.”361
Presented with this argument, not surprisingly many agencies are begrudging. As
the president of a mid-sized agency sniffs, “I do think there are projects for which
you don’t need [agency] level overhead or service, for example if the client knows
they need a brochure and it needs to say ‘x.’ But the more far-reaching the need
(and probably the larger the company) the more you need an agency.” She concludes, “You go to an agency when you need a higher level of skill set and when
you need a pair of outside eyes.”362 Interestingly, others say you only go outside
the agency when you need a fresh pair of eyes. (“Big agencies with long-standing
relationships hire outsiders to come shake things up. A virtual team brings a fresh
eye to the project.”363) A final agency defender vocalizes the standard criticism of
a virtual model. “From a creative standpoint, the looser model may come up with
a better solution, but in terms of sustainability, getting the message out across
global markets, you may need a combination of the two. Agencies provide smart
strategic thinking, and a global network that a handful of guys working out of a loft
can’t necessarily provide.”364
Yet what each of these critics fails to consider is that of late, the virtual model
includes strategists and implementers, people who think about the big picture and
those who can get the tradeshow booths delivered to four continents and installed on time. It can also access the most cutting-edge talent in any field—
including some fields that are still in the process of being invented. Networks can
extend anywhere an agency might and people tasked with getting a job done,
succeed. When the chemistry is right, continuity and extended mutual commitment exist between the client and the network’s core team. In short: When the
network is properly organized and led, it delivers all the major advantages of the

361

Ibid.

362

Lotterman, Deborah. Executive Vice President, Managing and Executive Creative Director. LehmanMillet, a
HealthSTAR Affliliate. Interview November 10, 2009, Boston, Massachusetts.

363

Dawson, Karen, Principal, Two Blue Spruce. Interview November 13, 2009, Newburyport, Massachusetts.

364

Hughes, Charles. Group Director Creative Services at The Clarks Companies North America. Interview
November 21, 2009, Newton, Massachusetts.

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traditional agency and addresses many of the short-comings, all for a fraction of
the cost. In the end, that is what matters to the client.
Mel Exon, Managing Partner of industry giant BBH’s global innovation unit states:
“Clients don’t really care how or by whom an idea got developed. They care that
it is good.”365
Increasingly clients are just looking at the work—not at how it is done. “Bricks and
mortar would not be a primary consideration,” says the Geneva-based Stacey
Minton of a global pharmaceutical company. “Rather, good work, smart ideas
with solid results, good chemistry and longevity with the account team, and a
respectful working relationship, where we can challenge one another and respect
the final decision of the client—these are most important. As always, cost can be
a factor, and certainly, the quality of work for money spent would be an important
factor in maintaining a relationship.”366
Agreeing, Jennifer Brett, partner in a two-man shop/fluid network dot•content,
explains why her clients are satisfied. “They see the work we have done and our
approach and they feel confident. It is irrelevant to them [whether we are an
agency or not]; it doesn’t effect them.”367
Certainly, some clients will always want the sense of security and solidity that
comes from a large office full of employees—just as some will want their agencies to deliver Super Bowl tickets. Exon observes, “If the industry is slow to
change, what can we expect from clients? Smaller, younger companies will be
more inclined to adopt a non-traditional, transmedia cross-platform approach to
communication.”368 But, it seems the change is occurring at the other end, with
entrenched corporate behemoths too.
Chip Bergh has spent his entire career with marketing powerhouse Procter &
Gamble. He is now Group President, Global Personal Care. He rebuts Exon’s

365

Exon, Mel. Crowdsourcing clients: where Agency Nil went next. BBH Labs, Posted August 11, 2009; downloaded October 14, 2009. http://bbh-labs.com/crowdsourcing-clients-where-agency-nil-went-next

366

Minton, Stacy. Director Management Communications at Merck Serono. Telephone interview November 21,
2009.

367

Brett, Jennifer. Partner, dot•content. Telephone interview July 16, 2009.

368

Exon.

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observation, saying “I don’t think it’s a big brand/small brand thing. Big brands are
moving away from the mainstream model; this should be a wake-up call. The
agencies have their thing they need to protect, so change is slow—but if they
lose the value equation they are dead.”369

5.3

Future fluidity

To be clear: The need for a good agency isn’t going away. In fact just the opposite: In this increasingly complex and constantly shifting marketing landscape,
brands will—more than ever—need outside counsel. Where before they couldn’t
produce a Super Bowl ad on their own, today they can’t keep up with all the disparate options.
What changes is the definition of “agency.”
The digital era has altered the modes and messages of marketing—requiring new
skill sets on an almost daily basis. Yes, agencies effectively supplement with
freelance expertise until they are able to integrate the knowledge in-house. And
yes, while “print” may be distributed electronically, billboards are a moving-picture
medium and “spots” are limited only by how long you can hold the audience’s
attention, the creative thought behind producing them remains much the same.
But from a business standpoint, the advent of the crowd—and its concomitant
increase in breadth and decrease in cost—is a true game changer. Today, there
is no need to have the expense of keeping the talent in-house. And if your competition is able to offer equal or better solutions for a quarter the price, because
they have switched to a fluid model, you will be out of business.
As a result, going forward, marketing groups will become increasingly permeable,
if not virtual. For many agencies, the transition to a network of experts (who only
bill for the work they actually do), will oddly make them truly full-service. As one
blogger elegantly phrased it, “Differentiation will be measured at the tip of the
agency spear in a combo of unique managerial skills and creativity—where ideas

369

Bergh, Charles V. Group President, Global Personal Care, Procter & Gamble. Interview December 15,
2009, Boston, Massachusetts.

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and their makers and managers merge. And, the virtual, just-in-time network behind them will be more highly-skilled than ever. You’re not gonna get hired if
you’re not any good.”370
Of course, change is hard. Existing agencies may have trouble recalibrating their
structures, cultures and mindsets. Older employees—and clients—may hesitate
to accept this less tangible form of work. It might take an entirely new generation
to embrace this approach. Mel Exon observes, “It is much easier to create new
neural pathways in fresh young brains than it is to unmake old ones.”371 More
importantly, the generation that has grown up in a completely digital world will
become a workforce that is completely comfortable operating virtually.
Meanwhile, as the model evolves, the map for established brands will be different
than the map for newer or smaller brands. To serve these clients, independent
agencies need to streamline and specialize, then team together in truly networked organizations, forming a larger more substantive version of a fluid network.
Then as the network concept evolves and matures, new models will gel and form.
Agencies will test options, find issues, and build capabilities—and they will surpass the old-school approach while decimating expenses. And as Chip Bergh
enthuses, “Who wouldn’t want the same work, the same caliber people, the same
thinking and insight and passion and hunger AND commitment at a substantially
lower cost?”372

5.4

But then what happens?

There are some patterns to human problem-solving that are as true for firefighters, line cooks and high school teachers as they are for marketers: People put a
lot of thought and energy into solving a problem once, even twice and sometimes
three times. Around the twentieth time they see the same problem, they just trot
out the solution that has worked before. Eventually, whenever faced with a prob370

Ebbert, John. The Virtual Agency Model. AdExchanger.com Posted November 16, 2009; downloaded Janu-

371

Exon.

372

Bergh.

ary 2, 2010. http://www.adexchanger.com/agencies/the-virtual-agency-model/

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lem, they assume one of the pre-determined solutions will fit. Which it does, until
the conditions shift.
Over the last few years, marketing conditions shifted.
Now, a new model has sprung up to answer the needs of the new paradigm. But
this model is still evolving, still finding its best form. Indeed, we may still be at
such an early stage of the revolution, that we still need to be asking what the
questions are, rather than trying to define the answers. Yet, we can be sure that
eventually a clearly delineated new model will emerge. And once it solidifies, becomes the status quo—becomes, de facto, the old model—what happens?
Clearly, the future is unknowable and the opportunities for research nearly limitless. While I strove to make it as representative as possible, my data collection
was perforce constrained by time and access; further inputs will inevitably lead to
further insights. Additionally, though I stand by my analysis and the conclusions I
have drawn from it, it is inevitable that further questions will arise. Bearing in mind
both these factors, I am hopeful that I have created a framework which both
agencies and researchers can use to advance the thinking over time.

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7.0

Interview subjects

7.1

Named interview subjects

Trevania Henderson

Abrahamson, Shaun. Founder, Colaboratorie Mutopo, a New York-based fiveman firm that uses a proprietary framework to build environments in
which organizations collaborate with large groups of customers and
partners. Clients include Discovery Channel Espanol, McDonald’s and
NARS; projects include Social Media Week 2010 and BetaCup. Interviews March 5, 2009; November 4, 2009, New York City, New York.
Allen, Matthew. Vice President, Account Director, Arnold Worldwide, a full-service
agency headquartered in Boston; Arnold Worldwide Partners, a global
network with offices in 75 countries, is owned by Havas. Clients include
consumer brands from Clinique to McDonald’s to Volvo. Interview
December 9, 2009, Boston, Massachusetts.
Alvarez Téllez, Carlos. Innovation Consultant, Play Mexico, an eight-year-old
Mexico-City-based boutique consultancy that develops ideas and
strategies to drive growth and improve performance. Clients range from
Mattel to Domino’s Pizza. Interview April 6, 2009, Berlin, Germany.
Amaro, Manuela. Marketing Director, TAM Airlines, the leading domestic airline in
Brazil, flying to 42 destinations in Brazil and 18 destinations abroad and
linking to an additional 35 destinations through regional alliances and a
subsidiary. 2006 annual revenue was pegged at 7,345 million BRL. Interview April 9, 2009, Berlin, Germany.
Arnof-Fenn, Paige. Founder, Mavens & Moguls, a Boston-based eight-year-old
marketing strategy consulting firm with a 50-person global fluid network.
Clients range from start-ups to Fortune 100 companies. Interview July
10, 2009, Somerville, Massachusetts.
Bergh, Charles V. Group President, Global Personal Care, Procter & Gamble, the
world’s largest multinational consumer goods company and the eighth

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largest corporation in the world by market capitalization; 2009 revenues
were pegged at $83,503 mm. Interview December 15, 2009, Boston,
Massachusetts.
Bjorgvinsson, Zo. Creative Director, Founder at New York-based Dotbox, a boutique digital agency that forms equity partnerships with many clients.
Clients include Harry Winston and bff. Telephone interview November
23, 2009.
Bloemendaal, Bevan. Sr. Global Director-Creative Services, Timberland, the
Stratham, New Hampshire-based $1.5 billion apparel company with 244
stores and factory outlets across the United States, Europe and Asia.
Telephone interview December 4, 2009.
Botan, Adrian. Chief Creative Officer, the Bucharest-based McCann Erickson
Romania, part of the Interpublic Group of Companies. Clients include
Cadbury, Vodaphone Romania and MTV. Interview March 31, 2009,
Berlin, Germany.
Brett, Jennifer. Partner, dot•content, a Boston-based marketing consulting firm
that specializes in helping companies align Web efforts with their business objectives via a fluid network. Clients include Motorola, Allaire/Macromedia and VIMAC. Telephone interview July 16, 2009.
Clark, Matthew. Global Marketing Director, Strategy Practice, The Boston Consulting Group, a Boston-based private global management consultancy
with 66 offices in 36 countries; 2007 revenues were pegged at $2,300
mm. Interview November 12, 2009, Boston, Massachusetts.
Clevenger, Terry. President Continuum Health Communications, a bicoastal fluid
network offering public relations strategy and implementation to life sciences companies and not-for-profits. Interview August 10, 2009, Boston,
Massachusetts.
Conrad, Michael. Former Vice Chairman and Chief Creative Officer, Leo Burnett
Worldwide, part of the Publicis Groupe; President of the Berlin School of
134

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Creative Leadership. Interview January 20, 2010, New York City, New
York.
Connor, Matthew. Executive Director of the Asian-based Wunderman World
Health. The Wunderman network spans over 120 offices in over 50
countries, with 15 specialized companies; it is part of Young & Rubicam
Brands, a member of WPP Group. Clients include: Baxter, Microsoft,
Ford Motor Company and Nokia. Skype interview March 7, 2010.
Curran, Nicole. Principal, WhyDesignWorks, a boutique Boston-based design
agency that delivers branding and communications solutions for clients
of all sizes, from MIT to Trinity Church. Interview August 28, 2009, Boston, Massachusetts.
Dawson, Karen. Principal, Two Blue Spruce, a New Hampshire-based fluid network focused on cross-channel marketing for clients such as Nestle,
Timberland, Wells Fargo, PUMA, Neiman Marcus and Harrods. Interview November 13, 2009, Newburyport, Massachusetts.
Deshler, Reed. Principal at AlignOrg Solutions, a global eight-man network of
strategic and organizational design consultants to Fortune 200 companies. Telephone interview November 4, 2009.
Doran, Amie. Senior Vice President, Director of Advertising and Promotions, Citizens Financial Group, $148 billion commercial bank holding company.
Interview February 4, 2010, Westwood, Massachusetts.
Dunn, Dick. Director, Coalition Marketing, BI, “The Business Improvement Company,” a privately held, Minneapolis-based, global marketing firm. Telephone interview November 25, 2009.
Epner, Paul. Director, Healthcare Improvement, Abbott Diagnostics, an operating
subsidiary of the Chicago-based Abbott Laboratories; 2009 revenues
were pegged at $29,527 mm. Telephone interview November 11, 2009.

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Figueroa, Iesa. Marketing Director, Insulet Corporation, a Boston-based medical
device start-up; 2006 revenues were pegged at $4 mm. Interview
September 30, 2009, Boston, Massachusetts.
Garcia, Vicente. Planner & Creative Director, Kardumen Digital Sympathy, a Barcelona-based fluid network targeting digital marketing for the consumer
goods industry. Clients include Club Iradier, mobifriends and CaiFor. Interview April 8, 2009, Berlin, Germany.
Heath, Michelle A. Vice President, Marketing, Currensee, a privately-held Bostonbased start-up social networking site for Forex traders. Revenues are
not available. Interview July 18, 2009, Cambridge, Massachusetts.
Hughes, Charles. Group Director Creative Services at The Clarks Companies
North America. Based in Newton Upper Falls, Massachusetts, the privately-held CCNA is a wholly owned subsidiary of C&J Clark, Limited of
Somerset, England. Revenue figures are not available. Interview November 21, 2009, Newton, Massachusetts.
Huynh, Lucky. Creative Director, FutureAgency Sydney, a fluid network based in
Sydney, Australian with partner groups in Shanghai, Singapore and
Sydney. Clients include Two Eights Wines, King Furniture, Darling Harbor Foreshore Authority. Email interview February 8, 2010.
Jones, Drew. Co-founder Austin Coworking; co-founder Shift 101 (previously AquiferDesign), a three-man international network (Austin, Texas; New
York City, New York; Sydney, Australia) that helps organizations shift
their brands, their workspace use and their mindsets. Telephone interview November 10, 2009.
Jorgensen, Lars Hemming. Partner, Chief Creative Officer, Story Worldwide, a
London-based, full-service agency with offices in six continents and clients including Unilever, Lexus and RCI. Telephone interview December
2, 2009.

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Kaskey, Theresa. Marketing Manager, John Hancock, a Boston-based subsidiary
of Manulife Financial; 2006 revenue was reported as 33,302 CAD. Interview December 16, 2009, Boston, Massachusetts.
Leber, Hank. CEO/Janitor, Agency Nil, an utterly fluid network run out of Richmond, Virginia, that primarily serves mom and pop clients. Telephone
interview July 9, 2009.
Leonetti, Elaine. Director, Strategic Development, Six Degrees, a boutique Phoenix-based sensory branding agency. Clients range from the Air Force to
Fairmont Hotels to Siemens Medical. Telephone interview November
20, 2009.
Lotterman, Deborah. Executive Vice President, Managing and Executive Creative
Director LehmanMillet, a 50-person, Boston-based medical communications firm, a HealthSTAR Affiliate with offices in Boston, Massachusetts;
Irvine, California; and Great Britain. Clients span Abbott Nutrition,
Bausch & Lomb, Genzyme. Interview November 10, 2009, Boston,
Massachusetts.
Magliozzi, Alyson Young. Director of Marketing Operations at a privately held,
New Hampshire-based apparel company. Revenue is estimated at $2
billion. November 20, 2009, North Andover, Massachusetts.
Markus, Craig. Executive Creative Director/Executive Vice President at New
York-based McCann Erickson & Tag Ideation, part of the Interpublic
Group of Companies. Clients include MasterCard and the US Army. Interview November 5, 2009, New York City, New York.
McFadden, Joleen. Senior Account Director at RAZR Marketing, a boutique Minneapolis-based marketing firm. Clients include MasterCard Yale and the
Window Replacement Company. Telephone interview November 23,
2009.

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Minton, Stacy. Director Management Communications, Merck Serono a Genevabased pharmaceutical company; 2006 revenue was reported as $2,805
mm. Telephone interview November 21, 2009.
Pappas, Peter. Principal, 8 Beacon Partners, a Boston-based fluid network. Clients include BMW, Comcast and Fidelity Investments. Telephone interview November 12, 2009.
Peterson, Rebecca. Vice President, Corporate Communications, Alkermes, Inc.,
a Cambridge, Massachusetts-based biotechnology company; 2007
revenue was reported as $240 mm. Interview July 17, 2009, Cambridge,
Massachusetts.
Polly, Ally. Head of Strategy and Brand Partnerships, Filmaka Entertainment Studios, a virtual community of directors, writers, actors, and other creative
artists from over 150 countries. Telephone interview February 3, 2010.
Reinhard, Keith. Chairman Emeritus, DDB Worldwide, part of the Omnicom
Group. Interview November 5, 2009, New York City, New York.
Sampson, Sara. Senior Vice President Marketing and Business Development, Incentium, a mid-sized Chattanooga-based provider of incentive and loyalty programs. Clients include Coca Cola, GM and Trump.
Telephone interview November 22, 2009.
Schiavello, Lisa. Executive Creative Director at Red Door Interactive, a San Diego-based boutique internet presence management company. Clients
include Overstock.com, Rubio’s Restaurants and Cricket Wireless.
Telephone interview December 4, 2009.
Shortt, Andy. Just One Project, a fluid network formed by Canadian agency Huxley Quayle von Bismark in response to the economic debacle. Telephone interview July 6, 2009.
Small, Carla. Principal Strategia Solutions, LLC, a fluid network offering marketing consulting and strategic project management. Clients include Biogen

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Idec, Novazyme (acquired by Genzyme) and Insulet Corporation. Interview April 17, 2009, Newton, Massachusetts.
Suda, Maureen. Principal, Suda Communications, LLC, a Rochester-based fluid
network that provides multiple aspects of public relations to the health
sciences industries. Clients include New York Biotechnology Association, Infinity Pharmaceuticals and Carestream Health. Telephone interview November 12, 2009.
Tanaka, Koichiro. Projector, a Tokyo-based fluid network that produces projectspecific work for clients such as Uniclo. Interview January 30, 2009, Tokyo, Japan. Subsequent email correspondence.
Tataru, Felix. General Manager, GMP Advertising, a full-service, Bucharestbased advertising and public relations firm. Clients include Millennium
Bank, Boom TV Channel and Traian Basescu’s presidential campaign.
Interview April 6, 2009, Berlin, Germany.
Winsor, John. CEO Victors & Spoils, a Boulder-based fluid network that provides
project-specific marketing services to Fortune 200 companies. Telephone interview March 1, 2010.
Wos, Liz, Director of Marketing, Peoria based Better Banks and Quincy-based
State Street Bank, two five-branch Illinois community banks. Telephone
interview November 9, 2009.

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Anonymous interview subjects

Client of Anomaly. In-person interview November 20, 2009.
Management consultant to Fortune 50 companies. Telephone interview November 24, 2009.
UBS AG, Senior Advertising Person. Zurich-based UBS is a leading global wealth
manager, investment bank and securities firm; 2008 revenue was reported as $83.9 billion. Telephone interview January 5, 2009.

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Addendum
I Analysis of Interviews
Although my interview questions were designed to be fairly general, in order to
allow conversations to develop organically, many of the responses were quite
specific. The charts below indicate opinions that arose naturally in the course of
discussion—not in answer to targeted “what do you think about…” probes.
Gauging Change
Twenty-five respondents specifically mentioned—prior to being prompted—that
the industry is changing.

Tab. 5 Gauging Change

What matters
Clients and practitioners often see different factors as being most important to
success. For instance:

Practitioners of all sizes and models value relationships both among the
team and with the client, whereas clients barely mention relationships.

Both large clients and large agencies value local knowledge, whereas
smaller groups didn’t mention it—presumably because with a more circumscribed target, they inherently have “local knowledge.”

Large clients emphasize creativity, whereas practitioners hardly mention
it; perhaps they think it goes without saying.

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Small agencies and virtual groups value consistent teams; do they feel the
need to mention them because they are presumed not to be able to supply consistency?

Everyone values category expertise—and everyone believes that more
cost-effective solutions are essential.

Tab. 6 What Matters

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What Is Irrelevant or No Longer Functional
There also appears to be some disparity between what large clients deem irrelevant (the global network per se) and what agencies mention. Notably, though a
bricks and mortar presence was the most frequently mentioned item that is no
longer relevant, it would appear that sentiment primarily stems from virtual
groups—and that they underestimate the necessity of a physical office.

Tab. 7 What Is Irrelevant or No Longer Functional

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II Sample Interviews
The following six interviews (three from practitioners and three from clients) give
a flavor of the information and ideas people shared with me. My questions are in
bold; bracketed comments explain the gist of a conversation or tangential information, but are not quotes.

1. Karen Dawson
Principal
Two Blue Spruce
At New Hampshire-based fluid network Two Blue Spruce, Dawson forms projectspecific teams, leads internal creative teams and acts as a consultant/subject
matter expert in marketing, creative, interactive and ecommerce. Clients range
from local businesses to Harrods, Wells Fargo, PUMA and Bath & Body Works.
Dawson began her career as an Associate Beauty Editor at Harper’s Bazaar,
then became an award-winning advertising copy writer for Elizabeth Arden and
the Creative Director, Copy for Timberland. She then served as Executive Vice
President, Executive Creative Director for digital marketing powerhouse Digitas,
leading the 175-person integrated creative department in Boston including core
creative (art/copy/design/UI) and creative services (traffic/production) working
with Fortune 500 brands.373
In-person interview, November 13, 2009, Newburyport, Massachusetts.

Why did you leave the big agency?
I had the dream job. The corner office with fantastic views, 175 people reporting
to me, a company at the top of its game. And it was soul deadening. I felt like a
princess trapped in a golden cage.

373

LinkedIn.

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For a creative, the sacrifice [of being in a big agency] is huge. As a creative person, if you are really doing what you do best, a corporation is not the right environment.
Why pick a virtual model?
For me, it allows greater flexibility to be with my family. It allows me to work with
people I respect. The work is tremendous and I pick teams that really fit the client.
Agencies say they do that, but there are dogs in every agency who are shifted
around from account to account; someone ends up with them.
Pace:

You can work extremely hard and then take a month off to refresh yourself. At Digitas, I never took a vacation without my computer. My family
would be skiing and I would be writing job reviews.

Quality:

You deliver a better product. The work is more thoughtful, because you
are not thinking concurrently about agency politics, or your time sheet or
the 16 other projects you have going. When I am with a client, I’m theirs.

You use your time differently and your surroundings are more conducive
to getting work done. The bullpen chatter doesn’t work for most writers.

At agencies people can spend months doing poor work, because all they
can do is talk about the possibility of layoffs. Everyone’s scared and it distracts them.

Team:

You have to have the right individual contributors.

At an agency you don’t travel alone. You have the art director/writer dynamic. That could be good, but it could be poisonous. The fluid arrangement is a lot more professional.

If the spark between two people matters to the project, then you need to
meet people ahead of time. That is true whether it is an agency or a virtual team. With the virtual model it is easier to shed someone who isn’t
working out.
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People are people. Someone may have had a horrible trip to the dentist
and will be in agony for the duration of your project. That is true at an
agency or outside an agency.

Most people who are really good have opted out of the agency world.
Where are the great ideas coming from? The Nike poetry ads may have
been thought up by an agency, but the lines are from a poet.

[Discusses the trend that ideas come from top people who have opted out and
then the agency implements them]

Can you give me an example of a project?
Right now I am building a fluid network for the Wellesley Admissions Department:
We came together to create a team. Within the RFP was a stipulation that a team
be put together with specific knowledge. We have a photographer, a designer, a
View Book Queen and I am the digital head.
The two cons to the group are that we have never worked together before and
how we explain a fluid model that doesn’t have an account team.
The pros: The people doing the work are all senior level; there is no swap out.
There is also no overhead.
How many jobs can you handle at once?
It depends.
I do a lot of work with Ruben, who was one of [the original] 3 SIG people [SIG
became Digitas while Karen was there]. He sold a lot of ecommerce. Now he
goes off for a year on big projects. When I follow him, it is all consuming; then it
takes awhile to get back on the radar. [We spoke a lot about Karen’s recent stint
with Ruben, leading a 35-person interactive creative group including design, copy
and photo studio, completing revamping website, email, viral marketing, catalog
and direct mail for harrods.com and harrodshampers.com]

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But right now jobs are coming in faster than I can knit straw into gold, I am doing
work for a wealth management firm, a local computer services firm, a fitness center—and now Ruben has a new gourmet food project: Golden Edibles.

What are the advantages and disadvantages of the virtual model from the
client perspective?

The virtual model offers cost savings and time savings. With agencies, so
much time is wasted presenting ideas internally up and up and up a level.

You have big groups that are sometimes overwhelmed and sometimes
have nothing to do.

Virtual groups have a senior team that are fairly egoless. They are fast
and efficient because they have lives and they want to get back to them.

Virtual teams also offer broader experience, vs. someone who was great,
but then got stuck on the Hummer account for 6 years.

Virtual works for small, middle sized companies and break-through work
for big clients.

Big agencies with long-standing relationships hire outsiders to come
shake things up. You think you know Power Bar, but you only know your
own experience. A virtual team brings a fresh eye to the project.

If the client needs heavy service with lots of deep knowledge and tons of
ability to churn stuff through at the drop of a hat, the agency model may
work better. If you need an idea now, virtual is better.

I agree that if you were doing a new footwear launch and you need to do
tradeshow booths and ship things to 4 countries you need an agency.
Agencies will always exist.

An agency needs to keep everyone working all the time. [discussion of
how the good people have been signed up and had their time allotted by
the account people well in advance] When a new project comes in, that
client gets the bums because the good people are already taken and the
bums have to work on something.

We can’t all do great work and all get along all the time. You move on.
With an agency that is harder.

How do you communicate with the client and among the team members?
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I take my cues from the client and the budget.

For greater economy I try to do everything virtually.

With the team, we use tons of email; some meetings.

It’s more friendly because everyone has access to the client; you are not
worried about “playing by the rules,” you are just trying to get the job
done.

There are no rules of engagement and a lot of caring.

I’ve never used any project management software. Depending on the
group, different roles are assigned (in some groups I may have the greatest organizational skills; in others someone else does)

The deeper I get into this model, the more I use the schedule to manage the client’s expectations (both in terms of turnaround and deliverable). The agency
model is: when the client has a contract, but then they get a surprise, [something
changes about the deliverable] your budgeted time is up and it is going to cost
more.
What issues have you found with the virtual model?
The virtual model gives me a lot of respect for the people in the agency who do
client management, account strategy people, planners, etc. Every creative person should have to fight for jobs, do the soliciting, the scheduling, the billing—just
to know how it works. The real downside of being a creative is that you can’t get
promoted, because you don’t know the business.
What’s the downside? Sometimes people move on. [At Digitas] GM was smart in
terms of buying people out. They paid for all their teams’ time, so they never
heard ‘Someone else has to do your work, because this person is on another
account now.’ But that is expensive, so is not necessarily right for great chunks of
business.
How do you see things shifting in the marketplace?
The world is changing. Lots of big companies have in-house teams. They get
their big ideas from outside, then reach out to local teams to implement them.

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Take Timberland for example. Every season a London Agency does a TV commercial and print ad for them. But Timberland can’t pay for them to do all the
takedowns, so the in-house team moves it into DM, POP, buys the media, etc.
When they are tapped out they reach out to a boutique agency and individual
contributors. It is a model for strong creative that scales at a good cost.
So what’s next for you?
I’m not so worried about next steps. I just have to put that silly list together for the
upcoming years so ok, no time like the present, right? I want to earn my MFA
write a book, most likely a memoir. I know , “Snooze!”, but there are too many
Karl Lagerfeld, Naomi Campbell, Mohammed Al-Fayed, early internet and
ecommerce stories to go to waste. I want to teach college/graduate school and I
want to travel extensively—India, China, right now,
I adore having the freedom to flit from one interesting project to the next, seldom
getting sucked into the politics, losing a night’s sleep or destroying overall good
health. I love that being a creative has allowed me to spend important time with
my kids. But if I find something I believe in and want to build, learn and
grow...well, I’m there in full regalia (clown costume, underwater diving gear,
Prada fall collection, whatever). in terms of Ruben, he’s been a wonderful stepping stone for incredible jobs including Neiman Marcus, The Limited, Harrods and
now Golden Edibles, but he’s just one ingredient in bubbling cauldron. He arrives
and leaves in my life like a brilliant wizard—stays for a month and flits off again
for years. It’s sorta nice.
For the next 3 years I’ll teach and continue to follow this talent-for-hire journey—
where else would it be possible to touch wealth management, food, fitness, apparel, beauty, computer services and insurance all in the same week?

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2. Deborah Lotterman
Executive Vice President/Managing Director
Executive Creative Director
LehmanMillet, Inc.
LehmanMillet is a 50-person medical communications firm dedicated to the device, diagnostic and specialty pharmaceutical sectors. Boston-based, it has offices in Irvine, California and Great Britain; it is a HealthSTAR Affiliate.
Lotterman has P&L responsibility and is the creative head. Prior to joining Lehman Millet as a Senior copywriter, she was an award-winning copywriter at two
boutique agencies, one specializing in healthcare communications, the other
specializing in direct mail packages for consumer publications.374
In-person interview, November 10, 2009, Boston, Massachusetts.

What is the value of the agency structure?
I think about the agency as an organism. It grows and changes. You add people
and shed people. But it has a process and a shared history, a shared knowledge.
Chip and I have worked together so long we can finish each other’s sentences.
So when a problem comes in, we can take it apart and solve it quickly. “Remember when we did xxx…” There is a value to teaming, so you complement each
other’s strengths and weaknesses. I know Chip will ask about X and he knows I
will forget Y so he covers it.
When I tell a client we can deliver, I know we can deliver because there is a level
of knowledge about the team and comfort in what they can do. When you pull
freelancers together, there is a ramp-up time and you don’t know if the combination will work. Whereas if I put the team together within the agency, I know it
does.

374

LinkedIn.

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The real structure [of an agency] helps for ways to think about doing work and for
clients to meet.
How do you work with clients?
We used to get an assignment and go into a black box and produce the answer.
That doesn’t work anymore. Clients need to be part of collaborating with the platform. Their insights, their knowledge of the market, the culture and the product
[joins with our knowledge] of creative—we really come together as two teams.
Maybe you could do that with a new group who might have great ideas and be
talented [but I don’t think it would be the same.]
That is also true of the planning and account team—they really need to know the
client’s business. You can hire a freelance project manager, but I don’t know that
you can have them know the client’s business and be a trusted advisor.
Is a consistent team important?
We keep the same people on an account. Most of our clients aren’t retainerbased, but we still keep their teams on wherever we can. We definitely keep the
account planners, and we keep the creative team as much as possible. They
know how to use the logo and they know where the landmines are.
What’s the value of the HealthSTAR network (to the agency or the clients)?
Right now, there is no value for us or the client. We haven’t personally realized it.
Right now we have a project with a HealthSTAR Communications PR company; it
would be nice to have more.
Is there any place for a fluid network?
I do think there are projects for which you don’t need an agency’s level of overhead or service—if the client knows they need a brochure and it needs to say “x.”
You go to an agency when you need a higher level of skill set and when you
need a pair of outside eyes. The more far-reaching the need, (and probably the
larger the company) the more you need an agency.
Will that continue to be true?
The world is changing very much and very fast and what agencies are now won’t
be the same in 5 years. Definitely it will be more virtual.
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I will be working with someone in California and someone in Japan, but we will
have worked together a dozen times. We’ll have a shared commitment, kinship,
enjoyment, and trust.
That is something that I love about the agency. There are people who make me
laugh. It is hard to get that over the phone. People younger than I am will be comfortable doing it over Facebook. I’m ready to change, but there are certain values
I want to preserve.
But it doesn’t all have to be email/gchat and Facebook. What about Skype?
Video-conferencing? That will help; so much is communicated through the eyes
and the facial expressions. And I can’t talk without my hands. I know this: if I want
to keep a client, or sell creative, I go there. Big ideas can’t be communicated over
the phone; it requires face to face.

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3. Keith Reinhard
Chairman Emeritus
DDB Worldwide
DDB Worldwide ranks among the world’s largest and most creative advertising
agency networks with 206 offices in 96 countries. DDB has won the most Grand
Prix in the 50-year history of the International Advertising Festival in Cannes.
A member of the Advertising Hall of Fame, Reinhard wrote McDonald’s “You Deserve a Break Today” and tongue twister, “Two-all-beef-patties-special-saucelettuce-cheese-pickles-onions on a sesame seed bun,” as well as State Farm’s,
“Just Like a Good Neighbor, State Farm Is There.”
In 1986 Reinhard was one of the architects of the three-way advertising industry
merger, creating Omnicom, which today ranks as the world’s largest advertising
and marketing services holding company with over 5,000 clients in more than 100
countries.375
In-person interview, November 5, 2009, New York City, New York.
What is happening to the industry today?
I believe the traditional agency model is really obsolete. We are competing to see
who can create the best horseshoes.
Hollywood used to have all these people under contract: the star, the crew, the
director. They discovered they didn’t have to do that; they could find talent suitable to the project. I think that is the model of the future. It has not yet been perfected on a broad scale.
What is important to retain?
At the core, an agency needs to have three disciplines:

375

Planning

The New Denver Ad Club: Info about Keith Reinhard, Chairman Emeritus DDB Worldwide and President,
Business for Diplomatic Action. Facebook website. Accessed March 9, 2010.
www.facebook.com/note.php?note_id=227729295312

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Sales

Creative Direction, which might come in two forms:

Trevania Henderson

Leonard Bernstein type person who can play the instruments, but
mostly acts as a synergist (though he knows exactly when the kettle
drums, then the direct mail, then the PR should come in and how they
should all work together. )

Reporting directly to him is a coordinator who connects the dots.

What is the biggest issue?
How the compensation works is still the unanswered question. We in the advertising business brought this on ourselves; the commission system is flawed. Pay
based on media was stupid from the start.

Bernbach said that when creative is properly practiced, it can make one ad do the
work of 10. In the old system, bad creative that requires 10 ads means you make
10 times as much as good creative that only requires one ad.
There is a woman in California who wrote a song for Marcel Blum’s; it took her 45
minutes. Being paid by the hour is ridiculous; that 45 minutes took her years and
years of training and practice.
I tried to change the compensation structure in 1990. We called it: “Total Creativity, Guaranteed Results.” We wanted to cover our costs, but otherwise we were
paid by how well we achieved the objective.
We said: “Pay us for how much we sell.” The problem is that “guarantee” sounds
like a stunt.
To make it work you need the client and the creative director to agree on a very
specific goal. Just to say “turn the brand around” could mean:

Get new users by expanding the client base

Increase the perception of value so we can raise the price

Steal the competition’s clients

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Clients wouldn’t go through the rigor or share data, so we couldn’t make the DDB
role real.
In 2000 P & G was paying all agencies based on sales, not on time [hours billed]
or media buy. The client is taking a risk; we should share that risk—and also
share the reward. Then if we are not on track in 6 months, we make a correction.
The other thing clients aren’t willing to do is create budgets directly related to the
objective. The budget says advertising got X last year, so they get X this year. In
another room someone is deciding the objectives. There has to be a connection
between resources and outcome. With time and money, the more you have of
one, the less you need of the other.
As we are going through a transition, I see agencies digging in, figuring out the
procurement model, saying it is unfair, chopping off fingers and toes, reducing
costs, cutting out the people they need for creativity. [They need instead to think
about working with clients on a better compensation model; one that is fairer to
everyone.]
I’ve been interested in the P & G model, 1 brand is all handled by one woman in
Paris. She can go into any P & G agency and put together a global program for
her brand. [Keith can supply a card]
Can a fluid network work for big clients?
How do you apply the fluid model to ExxonMobil that needs service in 56 countries? (and a different service in many of them). In Boston and New York how do
you know who to reach out to in Singapore and Abu Dhabi?
If you are designing a network you need the model that best serves clients. How
you locate the best talent? Find someone who thinks like you in Sao Paulo, Sydney, Berlin. Build a network of networks.
The ideal combination is to have [a distinct personality, a network brand culture].
The stronger the culture, the less need for structure. A brand culture that is understood has tremendous value to local entrepreneurs figuring it all out.

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McDonalds has done that by empowering like-minded people in markets worldwide; they could not sit in Oakbrook Illinois and think of programs that have been
having tremendous success in China—but the Chinese understand what’s valued
and provide direction.
ExxonMobil wants 1 throat to choke, 1 person responsible for bringing together
all direct marketing, all PR, etc. if you don’t like it there is only one person to
blame.
What changes do agencies need to make?
Other things agencies need to do—and they do it better in Germany than anywhere—is serve the client as a brand consultant 1st.
Go to non-clients and say, “We are not here to talk about an ad, we are here because we have been studying your brand and we have some observations to
share.” Go straight to the C level without insulting the lower ranks. Say, “Your
brand is in danger of becoming a commodity; here is what you could do.”
We used to be brand consultants in the 19060s; we just had to run a TV ad. Now
there are so many points of contact; people in the bank, people on the internet. [If
we are not brand consultants] we all become carpenters instead of architects and
people will buy carpenters at the lowest price.
Other examples and thoughts

Peter Arnell did the whole Pepsi rebrand; he said “Your bottle needs a
new design.” He talks for 35 minutes then charges $10K for new idea. His
minimum to take on a client is $50K. He is not paid by the hour; he gets a
big creative consulting fee; doesn’t retain clients or people. He has a staff
of creative and account people who implement his ideas. He has connections in the entertainment world; sees himself as a rock star.

It is for sure that if you were starting the business today no one would ever
come up with the model we have today.

The important thing for many clients is continuity of service. They get to
know and trust a team. They want to see that team, and they hate it when
the team is switched.

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Frank Cooper is a brilliant young executive at Pepsi. Consumers are doing
the creative.

We have a tool called brand foundations. For 300K we can do a brand
build that top executives feel they own.

I no longer have a staff of 15,000 in 96 countries. I pick and choose a
graphic designer, [a copywriter, the team I want. It is a fluid network.]

The question is how to get from one trapeze to another? If someone said
you have to takeover DDB. Right now there is DDB Worldwide and Tribal
DDB is part of it. They are the only digital agency in the network. But they
were Agency of the Year (not Digital Agency of the Year) and won the
Grand Prix at Cannes and film in the Netherlands. I would flip the model,
so that Tribal DDB Worldwide was the lead; I would lead with the digital
because that is where people are. It would be seen as radical for the
world’s second largest network to be digital first; there would be lots of
bruises and bruised egos and we would have to seek new management.

ADDENDUM
From a follow-on email
Thinking of your thesis subject and reflecting on our conversation, I have these
additional thoughts:

I recently spoke with a very bright young account man from Crispin Porter
who quit and joined Weiden Kennedy in New York because (among other
things) he says that coordinating a three office team is not as effective
and gratifying as having your account team, creative and planning, all in
one physical place so that social activities, inside and outside the workplace, and other “family” aspects can be integrated into the day to day environment. Interesting that this is a young man totally savvy about all the
new media who prefers human contact and camaraderie and believes it
makes for a better product and better client relationships.

You asked about what the big agencies have that should be preserved or
that would be missed in a newer model: To whatever I said, I would add
“culture” and “continuity.” I was speaking with the head of one of the DDB
offices who said his top concern is still the DDB culture, preserving it and
building upon it, because he believes it is culture that most differentiates
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one agency from another and he believes that culture is important to clients. As for continuity, clients still want the same “team” on their business
and resist and hate changes in personnel assigned to their business.
How to address “Culture” and “Continuity” might be considerations for
creating new models.

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4. Michelle A. Heath
Vice President, Marketing
Currensee
Currensee is a privately-held Boston-based start-up social networking site for
Forex traders Health’s primary responsibilities include branding, community building, user acquisition, go-to-market strategy (pricing, packaging, promo), joint
marketing programs and oversight of Currensee.com.
Previously Heath was Vice President of Marketing at Matchmine, a Web-based
media discovery platform, and held executive and marketing roles at E*TRADE
Financial, JP Morgan Chase, Fidelity Investments and Manulife Financial.376
Interview, July 18, 2009, Cambridge, Massachusetts.
How do you choose the person, agency or group to handle your creative?
What is the deciding factor? Why?
The biggest thing for me is balancing expense and experience.
I work in a start up so cost presides; I have to look at how can I make the most
out of the resources I have and what is going to get me the best result. I found
that I can’t just go to an agency and say: “I have half a million dollars, how shall I
spend it?” Now I have to really articulate my goals. I look at my network through
LinkedIn, for instance, to find the best people for the job. For example, I was producing a video, and I wanted to do it in a cheap and effective way. I asked “Who
knows some really good freelance videographers?” My friend from an agency
said “I can do it for half a million, but these two guys can do it for $35K.” I was
able to do a great job cost effectively.
Where do you find the candidates?
[through her personal network]

376

LinkedIn.

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Who is involved in the decision?
It depends on the type of decision, but for the most part, I have a lot of autonomy.
I run marketing for our company; if it is a big decision my CEO is the other decision maker with me. We have tightly controlled decision-making so we can move
quickly.
How many different agencies have you worked with?
A lot. 10 to 20.
What has been your experience with agencies?
It really depends on the agency. I almost feel like in some ways, especially in the
world of social media [which is what her company does] the agencies are behind.
They are so focused on traditional media buys and pitching commercials and big
ticket items that they missed the ball and are all struggling now and trying to
catch up.
Because my company is so grounded in social media, I don’t see myself using
the agencies; social media has outgrown them. I am surrounding myself with a
hub and spoke model; I have a bunch of resources who can write, produce video,
produce podcasts. I am hiring for the expertise that I need at the time.
Do you think agencies work efficiently? Does that matter to you?; Would
you use a fluid network rather than an agency? Why or why not?
I have found how things have really evolved. When I was running marketing for
Manulife Financial we used a great agency and they did all our print; we had a
whole marketing and advertising system; it is so different now than it was 10
years ago.
I probably wouldn’t choose to use an agency in any case. If I were to use an
agency it would have to be the right type of agency [the right expertise]. I wouldn’t
want to spend the money to just have them push the work around. It would have
to be a unique type of agency that I haven’t seen before. Even if we were twice
the size we are, to spend half a million a year on a retainer for the sake of having
them [is stupid]. Agencies don’t have the expertise to help you grow a viral brand.
They are doing it via freelancers who can bring that expertise. It is more a capability issue than an efficiency issue. They weren’t bringing me anything that I
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couldn’t have thought of myself. If I am spending that money, I am expecting you
to think WAY outside the box. I want to know what sort of thing should we be testing and trying, and we have pretty high standards for what that looks like.
With the hub and spoke system, there are moments when it feels a little crazy,
but by surrounding myself with highly capable individuals I [am able to accomplish much more. I would] have to spend time [with an agency anyway. I have a]
senior marketing/pr person who is freelancing. She is so capable; we talk once a
week and she is able to do a bunch of things on her own. We got our Facebook
page up in a week, we got our Twitter up in a week. If we had an agency it would
have taken a lot longer. Its an efficiency tradeoff.
But as the person responsible for the brand I will always have to be pretty involved with whatever we are doing, I won’t ever be in a place where I can just say
“the agency is handling that.” I think that is where brands get in trouble; they hand
too much over to the agency and they lose touch with who the people are touching their brand, with what the audience needs and what they don’t need, with
what is changing. If the agency says “This is great idea,” you need to decide
whether you agree based on what you think is happening in the market now—not
on what the agency thinks.
I guess it is sort of finding the right fit for your company and your brand and what
you need. In this world of social media and how messaging is evolving, the larger
agencies are having a hard time keeping up and making sure they are recruiting
the right talent and can compete with the smaller boutique agencies.
How do you judge good creative? Award winning or results?
It’s about finding the right answer for your company. [look at her personal blog;
are you marketing to stand out or stand back?] If everyone is vying for the same
attention; what are you doing to stand out? [The creative] needs to give me a pit
in my stomach. That is not for every company. I ask how is it pushing us forward,
and how is it creating something different for the target audience that is going to
make them pay attention? This is why capabilities are so important; you have to
have people surrounding you who are going to push that edge.

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I question: “Do people like it ? Will they think we are crazy? Will there be a backlash?” I am always pushing the boundaries.
How much of the strategy is internal vs. agency recommendation?
Currently it is all internal.
If your agency is part of a network, does that matter to you? Has it been
useful?
[Maybe as the company grows it could be useful. Company is expanding to the
UK and she realizes that there are cultural issues even when you “speak the
same language,” so she needs someone with feet on the street to advise about
tone, resonance, and even which social media will be impactful.]

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5. Stacy Minton
Director Management Communications
Merck Serono
Based in Geneva, Switzerland Merck Serono combines its complementary expertise in new chemical entities (NCEs) and new biological entities (NBEs) to develop and market innovative prescription drugs in over 150 countries worldwide.
Minton was previously Director, Neurology Communications at EMD Serono in
Boston; prior to that, she worked on the agency side—as an account supervisor
and publicist, respectively—at two mid-sized firms.377
Telephone interview, November 21, 2009

Please describe your job.
Today I handle management communications for the executive board at Merck
Serono. We use a few agencies [with specific areas of expertise] for specific projects; for instance, we are doing a branding project right now.
Previously, I was director of neurology communications [based in Massachusetts]. We used an agency for PR and had agencies do a lot of work for advocacy
groups like MS.
Everything about my job now is based in Geneva. Previously [ it was US-centric].
When I worked in the US we had one agency that handled all the PR and advocacy. Here it is much more an agency that has a specialty. If we have a specific
need [that we feel one group can’t handle, we have other groups come pitch it.]
Why not use a single agency?
I like working with different groups because it pushes us, [and pushes our thinking].

377

LinkedIn.

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We work with three good agencies that we tend to use a lot, plus specialty agencies [for projects] like branding or reputation audit. All our agencies are really project specific; [we don’t use an] agency of record model. It may be a project that
lasts for a year, but it’s very project based.
Here [in Geneva] we had one agency we worked with for a long time; we had an
established relationship with them. [But we had a new need in an area in which
they were not experts. We invited them to be part of a pitch, but we [were really
looking for someone with the existing knowledge base in this area.]
For example, the PR agency we work with does not have branding experience.
We did an agency pitch to branding agencies. We look for something very specific. [With pitches] even if you choose the agency you use a lot, it keeps them on
their toes and thinking about a project harder. Sometimes when we go to a pitch
we get a lot of good thinking, a lot of good ideas and energy around the project.
Using multiple agencies with no retainer, do you lose something in the
depth of the agency’s insight into your business /ease of the relationship?
Whenever you start out with a new agency it takes time to get used to people;
you need to build chemistry with different account people, so it is sometimes simpler using the same agency all the time. If it is always for the same type of project
then maybe that works for awhile. Once we established a good working relationship things worked, well…well, simply worked well because you have a relationship.
Any cons?
You might make a case that we would save money if we went with one agency. I
am very focused with each project to make sure it stays on budget and that the
project stays within the outline.
I am managing different projects that are quite different, so managing different
agencies is not a big deal. [I would rather have the right expertise than the convenience of a single agency; I’m not convinced that a single agency has the best
of anything.]

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If the projects are big enough, even with a single agency you will have different
teams, so it is the same management issue.]
[If you have quite a few things going on, you will still have multiple teams within
an agency]. The turnover rate in agencies is historically quite high, so you tend to
go through account managers anyway. You are constantly having to rebuild
these relationships anyway; certainly there are some exceptions, but in general
that is true.

Is this move to a more project specific model country driven (Switzerland
vs US) or a trend?
It is more about the agencies now: not a country-level issue. Historically we have
not worked with agencies a lot at the corporate level. My philosophy is to outsource because I can do more things. I am directing more, rather than implementing.
This is a little different than the historical approach for Ares Serono. They have
had more of a single relationship with an agency of record, though they would still
have different relationships for individual projects. Not a trend in the industry.
More how we have worked historically. We are carrying that to how we work today.
As we bring in more agencies, we are seeing levels of expertise that we really
like. Then we might grow more business with them. We brought an agency in to
pitch a project last year; they didn’t win the pitch—there were lots of decisionmakers—but we really liked them, so next time we had an opportunity, we invited
them in. They did a great job. Whenever we have other projects, we invite them.
We say, “We would like to ask you to work on this project.”
As we get to know more agencies and develop relationships and know their levels of competence we will move away from the pitching process. We could move
more to an agency of record model [but will continue to reach out to specific
agencies for specific expertise].

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Since you are marketing internationally, is there any benefit to an agency
with an international network or presence?
Its less about offices and locations; it’s about having a good world view to communicate globally.
Most agencies in Europe are located in the UK, which is a hybrid of US and
Europe. I tend to find the agencies we work with are OK about being global contributors, but still not there. It is something they need to work on. Having worked
over here for two years, it is very frustrating when they pitch a global campaign
and don’t even address the global aspect –translation, culture, how to handle it,
what are best practices, how you talk about things and how it will be perceived.
[In theory it] may be useful if they have a global agency network, but I haven’t
seen that they have found how to use the network effectively. I am sure the offices they have in Japan do great job for their Japanese clients and the offices
they have in NY do a great job for their NY clients, [but they don’t seem to be
communicating to each other]. If they are talking about [the benefits of a global
network] they seem superficial.
If they do truly have these networks, [then they need to] come together and share
ideas about how to best communicate and say “Here is an approach that works,
here is the best practice,” and share what they do for other clients. And agencies
need to think beyond “Here is a great program that is going out to the world”; they
need to think about how feasible it is to implement these ideas.
I am constantly getting proposals that say “we should have a microsite,” but if we
have people around the globe, not all of them speak English, so it is going to be
complicated. No one has thought through those issues. They need to have more
discussions among the networks about realistic implementation, how do we do
this and how will it work.
How do you handle that?
I ask a lot of questions, push back, challenge the program.
[Last year we had a] huge sales and marketing conference, 30,000 people in
Greece; it was a tremendous success by all counts. We did an agency pitch. But
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lots of the salespeople did not speak English. The burden was on [us] the client
to come up with the solution of communications issues in terms of translation. [At
the debrief I told them about those issues.]
I am constantly pushing back. I did a recap said, “This is a big area you missed.”
They are doing better now. Some is an issue of being a London agency and it is
too easy for them [to work in English—and too hard for them] to remember that it
is a big world. So I am pushing back, putting my ideas out there, challenging
them with my ideas, kind of pushing in that way.
Does it matter that an agency is bricks and mortar?
Bricks and mortar doesn’t matter to me. We work with one agency that brings in
people to build their team—as long as you can get the job done and implement
the ideas how you do it doesn’t matter.
It gets difficult if they are difficult to reach. There tends to be more focus in a
more traditional agency; these people work for the company [and the company]
wants to do good work for you. The concern [with an outsourced model] could be:
if these are people that you have just pulled together are you their key priority?
[they may have a million other things going on and can’t focus on you when you
need them] I don’t see any kind of a problem other than that.
How large are agencies you work with?

One that strictly does PR media probably has 20 people

One small specialized agency was part of WPP group: they were just 5
people but pulled in freelancers. [not accessing the rest of WPP]

We worked with one that is part of WeissComm Partners; they just
opened a London office. They did great work for us in the US, so we gave
them a shot with a small project—and they were terrible. They had a couple of high level big strategic thinkers, but couldn’t implement.

Brand Union is a fairly well known branding agency. We included bigger
branding agencies in the pitch, but we liked them better.

When you invite agencies to pitch, you say you get a lot of good ideas. Do
you use the ideas from agencies who don’t win the pitch too? (FYI, this
seems to be common practice).
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We might use the essence of a tactical idea, but we would never use any direct
ideas exactly as presented. If we want to use creative/design ideas, we offer to
buy the ideas (this has happened once or twice.) In general, we never want to
steal ideas and if we really like something but the agency wasn’t chosen, we’ll
discuss using the idea with them, and often, for the sake of maintaining a relationship, they are happy for us to use tactical ideas. We try to always respect the
agency’s work though, and not just use it as a free idea.
Since you hire project-specific agencies, I assume that all the strategic
thought around which projects to do is developed internally; is that true
and if so, might you be missing something by not having an agency thinking of you all the time too? As you say, you get good, fresh thinking when
you bring new people in to pitch.
We usually have a strategic idea, but we do invite the agency to challenge the
strategy and to bring new ideas to the table. So, I feel we have the strategic aspect well covered both through our thinking and an invitation to challenge/refine/rewrite by the pitching agencies.
As you become more confident in the capabilities of some of your agencies, you might move towards an agency of record; what would be the most
important qualities of such an agency? Would it have to be bricks and mortar?
Bricks and mortar would not be a primary consideration. Rather, good work, small
ideas with solid results, good chemistry and longevity with the account team, and
a respectful working relationship, where we can challenge one another and respect the final decision of the client. These are most important. As always, cost
can be a factor, and certainly, the quality of work for money spent would be an
important factor in maintaining a relationship.

How do you coordinate the various Serono messages among divisions
across the globe?
This is a challenge. We deliver a series of core messages to all regions and businesses, and we ask that people use these messages to underlie everything they
develop. We are in the process of refining the brand and are putting in mechanisms to better deliver strong overarching messages, including a positioning
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statement and tagline, along with core messages, and then ask that all groups
use these as the foundation. Monitoring adherence is another issue that we’ve
not yet solved and really treat on a case-by-case basis.

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6. Senior Advertising Person
UBS AG
UBS is a leading global wealth manager, investment banking and securities firm,
and one of the largest global asset managers. Additionally, in Switzerland, UBS is
the market leader in retail and commercial banking.
This person spoke on condition of anonymity, but has spent her entire career at
multi-billion dollar companies. She is based in the northeastern United States.
Telephone interview, January 5, 2010.
What sorts of marketing do you do? (target market, media used, etc.)
My role is in advertising for UBS, so my focus is traditional or non traditional advertising. From the client perspective we are b to b marketing to corporate institutions, b to c to affluent and high-net-worth individuals; in Switzerland we have
retail clients, too.
There is a shift in greater usage of nontraditional media that will change how we
market. There has been a shift for us based on consumption by our target audience; as their usage has changed, we have been forced to change as well. Print
and TV and the use of media is driven by target audience behavior; in any particular country there are different usage patterns; the US is fairly TV heavy,
Europe is much heavier in print. So we consider the target audience and the
penetration of media they use. Once you get out of the US market you see that
people read a lot.
Does a single agency handle all your work? If not, what is the arrangement/division of work?
Publicis is our primary agency, and we use their creative agency and Starcom
MediaVest. We use one big global network; occasionally we use smaller agencies for different product areas.
For us it is a matter of efficiency and consistency; when you have a single brand
that you want to ensure has consistency around the world, it is more efficient to
have one agency. We don’t have huge budgets, and it is more efficient to work
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with a single group in terms of spreading our money vs having different agencies
with different cost structures around the world.
Why give anything to other agencies?
It is more of a question of expertise: some products are fairly technical, and are
not worth the time and energy to get people deep in a product area; a specialist is
just more efficient. For derivatives, for example, it is much more efficient to go to
a trade agency with great expertise in the vertical area than training a generalist.
Why have you chosen to work with your agency(ies); what were the key
considerations in your selection?
The issue is where they were located from a hub perspective. We started out with
UBS in Switzerland, so we wanted a company that knew Switzerland particularly
well. [Publicis has] a good footprint in Europe and secondarily in US and Asia.
We decided to focus in terms of being a global player, so we moved the running
of the account from Switzerland to London; basically, if we are going after global
clients in major financial capitals, then it is prudent to have our communications
come out of one of those capitals. It signals that you won’t be driven out of Switzerland (independent thought). There are healthy checks and balances.
I am in the US, our agency is in London, the boss is in Switzerland. I have a great
boss, and I am a firm believer in having the best talent wherever they are; it is not
a US perspective—we are really global in our approach.
How do you work together?
When times are good we travel, when not, we don’t. We operate virtually pretty
well. Our functioning isn’t dependant on seeing each other, though there is always value in terms of face-to-face operations.
What do you expect the agency to bring to the table?
We are looking for good creative not only on the creative side, but also on the
media side. You pay people for their talent, their brains, being able to have the
insight and communicate it in a way that is impactful.

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Does it matter that your agency is part of a larger network? Has it been useful?
It is nice that they were together [creative and media], but not critical. It was convenient that the media company that was selected was in the same family. The
bigger issue is that there are other resources that we have been able to use—for
example they have a great arsenal of digital that we can access.
Great analytics, different companies within the group, we go there in the first
place. That makes things very efficient; it is easier for them to work together. And
they do work together.
I remember once having a digital away-day, we had three independent digital
companies that all were under the Publicis umbrella participating. It worked out
very well for us. We ended up using one other agency to do some work that
wasn’t our traditional agency—they were glad we kept it in the family; when they
can provide a value-add to the client it’s a win.
How much of your strategy is internal vs. agency recommendation?
The business strategy always comes from the client. The agency decides how to
bring it to life from the communications perspective. We are responsible for positioning, they are responsible for how to communicate in a way that helps generate business. There is a difference in terms of what each participants’ role is. We
involve them when we do research. They have smart strategic people that have
great insights, so we don’t keep things so close to the vest that we don’t get good
ideas.
Are agencies efficient? Does it matter?
We can work efficiently in terms of our communications around the world. We
have people in the agency that can execute a single brand campaign in China,
the US, Germany, etc. Are all agencies efficient? No the [big agencies] have to
have more people to do things you wouldn’t need in a smaller agency; there is a
cost to running a global account.
The question of how you do things more cheaply without losing quality is not a
new one.

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Is there change occurring in the industry?
There is huge margin pressure on the agencies, in terms of client budgets. I am
sure there are very smart people who are trying to figure out how to configure
their businesses, if clients want more and want to pay less. And there is margin
pressure. I don’t think anyone has figured it out yet.
What we are thinking about is value-based compensation: the new way to think
about it: change the thinking from one based on labor to paying for what you consider value. A pay-for-performance component, which I think most agencies want.
It’s a fairly slippery slope, though. Coke has been the lead force in terms of this
approach. We are considering changing to that approach.
It has to be measurable by metrics; now, the key is what is the appropriate metric
that you as a client and agency agree on. For creative that is more challenging
than for media. Yes, we believe we should pay for performance, but both parties
need to agree on what the metrics are and do it. From the creative standpoint, for
example new work [can be measured] based on copy testing. It needs to break
through, it needs to have recall—those are fair things. The intent is that there has
to be a scheme where both people agree.
What things need to change?
How agencies get compensated, how they staff their accounts to get the work
done. There is a traditional way of agencies having a hierarchy of talent of different levels who get trained; [agencies] have to figure out a way to train their own
people, but not necessary make it the clients job to be part of the training program
I am less interested in the assistant AE; I want access to the right people. More
clients are going to be like me, so agencies need to look at the model to make
sure how they grow their talent, but it can’t be the assistant product manager facing off the with the assistant account executive. There are too many layers that I
don’t need to pay for.
What things are important to retain?
You pay people for their talent.

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There is an agency environment that fosters a level of creativity. How necessary
that is depends what you want the skill set to be.
Depending on how long the account has been at a shop, the people in the
agency have more of a history than the people in the marketing department. It is
good that someone has it [the history]! In the agency it gives you some staying
power.
I believe in paying for brains.

Would you ever consider a virtual company or one that outsources much of
the work (i.e. Victors and Spoils)?
If we have an idea we need to make sure that it works around the world; having
resources that can face off against resources in all those countries is valuable.
Particularly when we are talking in Asia, we want to know if the idea works in
China, we want people on the ground there is—it is different. You can’t have
people who are not Japanese attempting to take an idea to Japan. You need
someone who understands the culture, who understands UBS, who really wants
to make the communications relevant. Working with a local agency may be
cheaper, but from a consistency standpoint it doesn’t work.
You need a global network to protect a global brand.
It is a question of centralized control vs. the entrepreneurial sprit (I can do it
faster, cheaper). The answer lies somewhere in the balance; almost every global
brand has that challenge.
English is the global language. In the company we start in English. You start in
one language and don’t translate, you transcreate, don’t do a direct translation.
Pan European press, pan Asian press—it is all in English. That is a very efficient
medium for us. Then we test work in native language; it is an interesting tension.

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Acknowledgments

I am grateful to all my many interviewees, people who generously gave their time
and insights—and often their own contacts—to provide the raw data that enabled
me to write this thesis at all.
To Doug Guthrie and David Slocum for tireless and gracious responses to seemingly endless questions, both macro and picayune; their answers shaped my
topic, my research and my final product.
To my thesis buddy Matthew Connor for his willingness to trudge through an unedited version and offer his critical eye and supportive commentary.
To Nicole Curran and Frank Henkel at WhyDesignWorks for helping me translate
words into graphics.
To my husband John, whose immediate response to harebrained schemes like
graduate school in Europe is always, “How can I help?”
And to my son, Cole, who, notwithstanding his relief at having me more focused
on my homework than on his, has been hugely patient, generous, endless cheery
and outstandingly supportive.
Thank you.

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